Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — DEFENCE

Low Flying

Mr. Kirkwood: To ask the Secretary of State for Defence what recent representations he has received on low flying; and if he will make a statement.

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Kenneth Carlisle): My Department has recently received a number of representations from hon. Members and the general public on matters relating to military low-flying training.

Mr. Kirkwood: May I add to those representations the ones that haw been made to me locally by committees responsible for organising the summer common riding festivals in the central Borders and Scotland? It does not take much imagination to understand the effect of a Tornado flying at 250 knots and at 250 ft, on a cavalcade of 200 horses on top of the Border hills. Will the Minister consider increasing the current exclusion zones of 1 nautical mile to about 5 nautical miles in order to give those cavalcades some protection?

Mr. Carlisle: I am grateful to the hon. Gentleman for giving me notice of his question. I have considered the point carefully. As he knows, we are always ready to give an avoidance of 1 mile on each side of the tracks used by these riders. The problem is that there are 75 ridings a year and to give a wider berth would concentrate our low flying over other parts of the countryside to the detriment of the inhabitants there. We have had few complaints from those taking part in the ridings and nearly half the ridings take place at weekends when there is little low flying. I do not believe that the case has been made for a change in our policy.

Mr. Quentin Davies: Do my right hon. and hon. Friends agree that if we are to have an effective Royal Air Force, it is essential that our pilots are given the best possible training, including training in operating at below the level of enemy radar? Do my right hon. and hon. Friends agree that the magnificent and heroic performance of our pilots in the Gulf thoroughly vindicates the training programme that we have had up to now? Will they accept that in Lincolnshire, where we have more RAF stations than any other part of the country, there is wide appreciation of those facts?

Mr. Carlisle: I am grateful to my hon. Friend for the realistic way in which he faces the problem. In Lincolnshire we are proud of the role of the RAF and its life in our county. It might be helpful to know that it is planned that low flying by jets will decline by about 30 per cent. over the next three years. In the worst-affected areas, such as the Lake District, the Borders and Wales, we are establishing community relations officers to provide a closer link with local people.

Trident

Mr. Salmond: To ask the Secretary of State for Defence if he will make a statement on the progress of the Trident programme.

Mr. Jacques Arnold: To ask the Secretary of State for Defence when he now expects to place the order for the fourth Trident submarine.

The Secretary of State for Defence (Mr. Tom King): The Trident programme continues on time towards its in-service date at an estimated final cost of £10,518 million. This marks a further small reduction against last year's estimate and an overall real reduction of £3 billion against the original 1982 forecast.
We plan to place the order for the fourth Trident submarine with VSEL at Barrow as soon as contract negotiations have been satisfactorily completed.

Mr. Salmond: Does the Secretary of State accept that the debate on Trident in Scotland is not on whether we should have three or four boats or on the number of warheads per missile but on whether we should proceed with expenditure which, over its lifetime, could amount to £23,000 million on a useless, dangerous military white elephant? Does the Secretary of State accept that there has not been, is not and will not be a majority in Scotland for the Trident missile system and that, ultimately, its deployment will depend on the consent not of the Westminster Parliament but of the Scottish people, and it will not be forthcoming?

Mr. King: I have not met many Scottish people who wish to be left exposed to the nuclear blackmail that could come from the huge nuclear arsenal which will remain for many years on the continent and in Russia. The Scottish people whom I meet who work in the shipyards at Yarrow take pride in building ships for the Royal Navy whose orders would presumably be lost to them if they had the pleasure of being represented by an SNP policy. I do not think that the 23,000 people presently involved in the Trident programme think that their efforts are wasted. They are proud of their contribution to the essential safeguarding of our country.

Mr. Arnold: What does the Secretary of State believe to be the Russian assessment of our Trident programme and, indeed, their assessment of British public opinion on the subject?

Mr. King: The whole world had the opportunity of hearing on television what President Yeltsin thought. He said that the number of nuclear weapons at the disposal of the United Kingdom was not comparable with theirs and that, therefore, the matter was not worth discussion. The Opposition have complained for years that our determination to maintain an essential minimum


safeguard for our country with a nuclear deterrent was somehow an obstacle to the necessary task of reducing the overblown nuclear arsenals of the super-powers, but President Yeltsin dealt with their arguments in one wholly destructive answer.

Mr. Home Robertson: Will the Secretary of State confirm that fully two thirds of the costs of Trident have already been spent or contractually committed by the present Government? Will he further confirm that the consequences of the Scottish National party's policies would be to deprive many hundreds of people of their employment at Rosyth and on the Clyde while still leaving Scotland at risk from the consequences of a nuclear attack on Barrow or on the north of England? We would have all the risk but none of the advantages.

Mr. King: I am grateful for the hon. Gentleman's support which I take to be absolutely unequivocal support for the Trident programme. I wish I thought that his colleagues were beginning to share that idea—perhaps we have an alliance here. Not all the expenditure is committed. The hon. Gentleman and his colleagues can save money if they do not believe in the nuclear deterrent, and it is high time that they told the country what their priorities are.

Mr. Franks: The Secretary of State will be aware of the further 600 redundancies announced yesterday in the shipyards in Barrow which will bring to 4,500 the number of jobs lost since "Options for Change" was announced about 18 months ago. Will he therefore take this opportunity to emphasise the employment aspect as well as the strategic importance of the fourth submarine? Will he also note the observations of Barrow Labour party which has described the Opposition's promise to give work equivalent to that involved in a fourth submarine as ignorant and ill-informed?

Mr. King: Clearly, I heard with disappointment the announcement made by VSEL yesterday. I note that 10,400 are presently employed. It is a disappointment that there are to be 600 redundancies, but there is a continuing significant level of employment in defence at Barrow which is dependent on it and which has been sustained by the Government's commitment to a strong defence. I weep for Barrow's prospects were there conceivably any change in Government, because the right hon. Member for Manchester, Gorton (Mr. Kaufman) has said that the Opposition would replace a cancelled fourth boat with equivalent work only to be denounced by his own candidate in Barrow who used the words "ignorant and ill-informed".

Mr. O'Neill: Will the Secretary of State explain to the House the confusion that arose yesterday following the Prime Minister's statement on the United Nations meeting? The confusion arose between the subsequent press briefings given by the hon. and learned Member for Grantham (Mr. Hogg), the Minister of State, Foreign and Commonwealth Office, and the Prime Minister's statements about what were likely to be the maximum number of warheads on the Trident programme. Although I recognise that for obvious reasons the Secretary of State will not want to be locked or painted into a figure of 512 as the maximum, which is what it would be, will he tell the House whether, in the light of last week's discussions with President Yeltsin and the changes that have taken place

since Christmas, the Government are now considering the minimum deterrent to be somewhat lower than they had previously considered it necessary to be?

Mr. King: The hon. Gentleman knows the situation perfectly well. We have never gone beyond the statement that we will have a maximum of 128 warheads per submarine. That is our position and that is where we remain. We have also made it absolutely clear that we will ensure that our deterrent is effective and absolutely credible, and that it puts real fear into any potential aggressor about the damage that he could suffer if he were to attack this country. That is our position and we have made it absolutely clear that we will do that within the terms of operating a minimum deterrent, which is obviously the sensible way to go.
The hon. Gentleman seems to be totally ignorant of and unable to adjust to President Yeltsin's announcement in which he made it absolutely clear that our determination to maintain a minimum deterrent is no obstruction to the determination that he and President Bush have to reduce the nuclear arsenals of the super-powers.

Defence Expenditure

Mr. Paice: To ask the Secretary of State for Defence what estimates he has made of the effect on the reactive capability of United Kingdom defence industries of a reduction in defence expenditure to the Western European Union average.

The Minister of State for Defence Procurement (Mr. Alan Clark): We have no intention of reducing defence expenditure to the WEU average; we have made no estimate of the implications of such a reduction.

Mr. Paice: I thank my right hon. Friend. Does he agree that in this very uncertain world, if such a reduction were to take place, it would seriously jeopardise this country's ability to defend itself? That policy would destroy hundreds of thousands of jobs in defence industries, including many in my constituency, yet it has been endorsed on no fewer than three occasions by large majorities at the Labour party conference.

Mr. Clark: Yes, that is right. That policy has been endorsed by majorities of more than 2 million pounds—[Interruption.]—members on each occasion. It is especially interesting that, leaving aside the damage that such a policy would do to the services by wiping out 10 frigates, four submarines and four squadrons of Tornados, there has never been a suggestion in any of the texts that money would be returned to the taxpayer. In every resolution, there has been a reference to making the money available for other "social and economic priorities", thus confirming that the Labour party is the party of high taxation. Labour regards reducing taxes and defending ourselves as equally sinful.

Mr. Rogers: It is a bit hypocritical both for the questioner and for the Minister, who is a representative of the Government of unemployment, to criticise potential job losses under a Labour Government. The Secretary of State has presided over the loss of hundreds of thousands of jobs in the defence industry in recent years. Since June 1990—[HON. MEMBERS: "Question!"] Since June 1990, 74,000 jobs have been lost in the defence industry. Since the Prime Minister came to power, 1,000 jobs have been


lost each month. Some 4,500 jobs have been lost in Barrow. What a bunch of hypocritical mealy-mouthed people! When will the Minister stop the cuts in the defence industry or at least set up a defence diversification agency to help people such as those in Barrow who will be put out of work?

Mr. Clark: It is always interesting to note that the moment one reminds Labour Members of their party's commitment to high taxation, they lose control of the argument completely and deliver tirades along the lines of that to which the hon. Gentleman has just subjected the House. We regret very much the fact that there have been job losses in the defence industry—of course—and the figure is 25,000—[Interruption.] If the hon. Gentleman will not even listen to the reply to his argument it is his loss. The total losses have been of the order of 25,000, but the fact remains that there are still more than 140,000 people directly involved in the defence industry and more than 120,000 indirectly involved. Every one of those workers knows exactly what his likely fate will be should the Labour party ever return to power.

Mr. Wilkinson: Is not it a strong strategic interest of the United Kingdom to maintain an effective and comprehensive defence industrial base, in case international circumstances change? In that regard, does my right hon. Friend support the WEU proposal of a European surveillance satellite system to engender confidence and ensure that arms control measures are adhered to?

Mr. Clark: It will be increasingly important to ensure that all surveillance is comprehensive and very widely directed. In no sector is that more important than in the field of nuclear proliferation. All countries that are committed to non-proliferation and all the signatories to the treaty must be prepared both for greater resources to go into the inspection process and to submit to greater surveillance.

Nuclear Weapons

Mrs. Fyfe: To ask the Secretary of State for Defence what steps he is taking to encourage non-proliferation of nuclear weapons.

Mr. Tom King: The greatest immediate risk of proliferation follows the disintegration of the Soviet Union with its massive nuclear stockpile and large number of nuclear scientists. We are actively involved in discussion with all the former Soviet republics where nuclear weapons are at present located—particularly with Russia. We are also giving full support to the implementation of United Nations Security Council resolution 687, for the elimination of the Iraqi nuclear weapons programme.

Mrs. Fyfe: I thank the Secretary of State for that answer. Does he want the British public to realise that 128 warheads per submarine equals 512 warheads for four submarines, and that that equates to 2,560 Hiroshimas? Even if he seeks to deploy fewer warheads per boat than the maximum possible, why should not other countries follow his example and say that that is also their ideal of a minimum deterrent? Does non-proliferation apply to everyone else but not to us?

Mr. King: The hon. Lady seems quite unaware of the fact that, not long ago, I announced from the Dispatch

Box what is effectively a halving of our sub-strategic nuclear weapons. NATO will now restrict itself to only one nuclear system, as opposed to the Soviet Union—or Russia now—with three, and we in NATO can point to the fact that we will soon have about one tenth the number of nuclear warheads that we had 10 years ago. I hope that the hon. Lady will recognise the changes that have taken place. I remind her that, following President Yeltsin's recent visit and the welcome changes in connection with what is a hugely large arsenal of nuclear weapons, the top priority of proliferation at present is to ensure that we take action in the ways that I described in my answer. The fact that the hon. Lady rose with a prepared supplementary, ignoring the significance of the massive problems of the time, does her little credit.

Mr. Nicholls: Does my right hon. Friend agree that even if one ignores what is happening in the former USSR, there are other countries in the world that are potential aggressors and which either have nuclear capacity or may be near to acquiring it? Would not it be the height of folly to give away our own independent nuclear deterrent while any potential aggressor has the ability to strike at us?

Mr. King: I entirely agree. I was asked about proliferation. We have to face the fact that there is a bigger risk of nuclear proliferation at present than the world has ever known. As a result, while the right approach is to take the most positive steps that we can to help to deal with that problem, we have a duty to our own people also to ensure that we maintain that elementary, basic, minimum safeguard of our own nuclear deterrent. Anybody who dreamt of surrendering that basic safeguard at this time would be doing the gravest disservice to current and possibly to future generations in Britain.

Mr. O'Neill: May I welcome the attempts that the Government are making, in conjunction with the Russians and the Confederation of Independent States, to reduce and dismantle the nuclear weapons arsenals? That is a most welcome and urgent step. In the current discussions about the size of the nuclear arsenal, is the Secretary of State still committed to bringing on stream another replacement for the WE177 free-fall bomb? Although that may not be against a literal interpretation of the wording of the nuclear non-proliferation treaty, would not such a move be a gross affront to the potential proliferators who are reconsidering the need to indulge in the acquisition of nuclear weapons? Would it not be better for the country and for the nuclear proliferation process for the Government to abandon their next generation of air-launched cruise missiles?

Mr. King: The hon. Gentleman's supplementary question ignored the fact that we are talking about NATO policy. In fact, we are talking about a proposed change in NATO policy, that is what matters—not about a unilateral decision by the Government—which was agreed at the London NATO summit. We are considering the options at the moment, and I have nothing to add to that.

Mr. Dickens: Will my right hon. Friend please confirm that it is absolutely necessary for us to have a minimum deterrent so that the people of the United Kingdom are safe? In terms of that deterrent, is it not right that when a submarine is cruising anywhere in the world's oceans, any


potential aggressor who attacks the United Kingdom will stand the risk of unacceptable and devastating retaliation from us?

Mr. King: I am grateful to my hon. Friend; that is precisely the point. Indeed, that is precisely the point which was so clearly recognised by President Yeltsin. We have criticised the building-up of such a huge nuclear arsenal, but my hon. Friend may have noticed that President Yeltsin is talking of reducing the number of warheads to 2,500, which he regards as reducing to a deterrent. We believe that it is right to have a minimum deterrent so that no potential aggressor can think that this country could be attacked and that they could be unaffected by any retaliation.

Ex-Service Personnel (Housing)

Mr. Bill Michie: To ask the Secretary of State for Defence what plans he has to consult local authorities on housing requirements for ex-service personnel.

The Minister of State for the Armed Forces (Mr. Archie Hamilton): In consultation with the Department of the Environment and the Scottish Office, which are represented on MOD's housing task force, my Department has recently been in contact with all local authorities, seeking information on their arrangements for the provision of housing for ex-service personnel.

Mr. Michie: The Minister has said that his Department has contacted the local authorities, but when will the Government accept that the local authorities have the strategy and the enabling powers to make provision for housing, especially for the homeless and perhaps for some of the 40,000 personnel who will be leaving the armed forces in the near future? Why is the task force in consultation with the Housing Corporation but refusing to consult the local authorities which have that power? Is it not a fact that the Government still have such a bigoted bias against local authorities that they will even put at risk the future housing of our ex-service families?

Mr. Hamilton: Let me first put the hon. Gentleman right about the figure of 40,000—40,000 is the number that we have put on the reduction of personnel in the Army, but much of that reduction will be achieved by natural wastage. I remind the hon. Gentleman that about 30,000 people leave the armed forces every year anyway. We are expecting in excess of 10,000 redundancies, which will be spread over three years. We must put those numbers in perspective.
On the housing task force, we feel that the representatives of the Department of the Environment are well aware of the position of the local authorities in relation to housing. Their representations have been valuable. In addition, Lady Anson, the chairman of the Association of District Councils, has been in touch with my noble Friend the Under-Secretary of State for the Armed Forces.

Sir Giles Shaw: Does my right hon. Friend accept that his contact with the Housing Corporation must be the best way forward and can be usefully developed? Will he further accept that service men are looking for the opportunity to obtain a rung on the ownership ladder and that the Housing Corporation and its satellite housing associations can most assuredly provide that? Is my right

hon. Friend confident that nationwide assistance will be available to enable those excellent people to be rehabilitated in our community?

Mr. Hamilton: Yes. We are in touch on that. The question arises whether some of our married quarters may be sold to housing associations who will give priority to service men. Many different options are being considered. My hon. Friend might be interested to know that we sent out a questionnaire to 5,293 people who volunteered for redundancy and 76 per cent. of them returned it. Of those people who had volunteered for redundancy, 49 per cent. already owned their own homes and another 34 per cent. intended to buy. Therefore, the majority of those who are to be made redundant will either have their own homes or will buy them shortly after.

Mr. Cartwright: When the Minister next talks to the local authorities about this issue, will he point out that many of them no longer give rehousing priority to ex-service personnel, but expect them to go through the normal homeless families procedures? Does he agree that that is a pretty poor way in which to treat people who have given their lives to the service of their country?

Mr. Hamilton: I absolutely accept everything that the hon. Gentleman says. One of our concerns is that our ex-service men should not be in temporary accommodation. That is why we are considering the use of our married quarters to ensure that that does not happen.

Sir Peter Emery: Will my right hon. Friend consider further the approach that I have made to the Secretary of State that vacant married quarters in civilian areas around army camps should be co-ordinated into my right hon. Friend's scheme? If they are to remain empty at any particular time short-held leases could be used so that the barracks could be used for local housing rather than stay vacant.

Mr. Hamilton: Yes, this has always been a problem, but it has become worse recently, I am afraid, because of the people who have been made redundant and who have come back from Germany. The stocks of empty houses may be larger at this time. I take that point and we are keeping in close contact with local authorities.

Mr. Boyes: Does the Minister accept that there is a real need and opportunity for bold and radical measures? Local housing authorities have been starved of cash for a number of years by the Government. However, local authorities and the Ministry of Defence have empty sub-standard housing on their books. Will the Minister release MOD votes to allow local authorities, in collaboration with the MOD, to bring empty housing owned by the local authorities and the MOD up to acceptable standards and then transfer it to local authority control for the express purpose of providing homes to ex-service personnel? Or will this Government's ideological opposition to council housing prevent them from doing that?

Mr. Hamilton: Most of what is being done by my Department—[HON. MEMBERS: "Reading".] It is a blank piece of paper. Most of that work is carried out in conjunction with housing asociations and is financed by the Housing Corporation. On the whole, we would prefer to dispose of blocks of married quarters to housing associations rather than to local authorities. We do not


exclude that possibility, but we find that when we talk to local authorities that they do not have the money to buy married quarters in the first place.

"Options for Change"

Dr. Goodson-Wickes: To ask the Secretary of State for Defence what further consultations he has had regarding "Options for Change", in the light of the disintegration of the Soviet Union.

Mr. Tom King: We have set out our plans in "Britain's Defence for the 90s" and we are proceeding to implement those over the next four years. I do not propose future reductions in the light of the disintegration of the Soviet Union, and given the continuing instability in Europe and elsewhere.

Dr. Goodson-Wickes: Can my right hon. Friend assure the House, nevertheless, that the validity of the arguments behind "Options for Change" will be kept under constant review, not least because of the disintegration of the Warsaw pact, followed by the emergence of new power structures within the Soviet Union?

Mr. King: I appreciate that concern. One of the bases that underpinned "Options for Change" was the disintegration of the Warsaw pact, the establishment of independence in Czechoslovakia, Hungary, Poland and other former allies, the reunification of Germany and the disappearance of East Germany. We did not anticipate the rapid disintegration of the Soviet Union. There are some who advocate that, now that that has happened, the world is somehow a safer place. We do not believe that that is correct. We believe that the world is passing through a period of considerable instability and therefore we do not propose further reductions in our defence forces.

Sir Patrick Duffy: In any further consideration of "Options for Change" will the Minister take into account lessons from the Gulf war such as heavy lift, better intelligence especially on targeting, mine countermeasures, which may have inhibited an amphibious operation, and, above all, fire from friendly forces, which underlines the need for the IFF—identification, friend or foe—system which has so far eluded NATO?

Mr. King: I am glad to confirm that these lessons have been learnt from our consideration of the Gulf conflict. They have been discussed by both NATO and the Western European Union. Heavy lift and enhanced intelligence capability are two very specific matters that have been considered in those forums.

Defence Contracts (Devon)

Mr. Speller: To ask the Secretary of State for Defence if he will visit factories in north Devon which have been involved in defence contracts and seek to maintain this link.

Mr. Alan Clark: I should be very happy to do so.

Mr. Speller: I thank my right hon. Friend for his brisk but satisfactory reply. Will he please bear in mind the fact that it is essential that, where possible, we buy from British manufacturers across the country? May I commend to him a visit to north Devon and ask him to remember Coutant's of Ilfracombe and firms like High Temperature of South

Molton, Hobart's, CQC and others? It is important that we retain these excellent companies even if some of the swords become ploughshares.

Mr. Clark: My hon. Friend makes a very good point. All the firms that he has mentioned contribute to the employment of the 130,000 people who are directly concerned with the defence industry. He did not mention Cray Marine, a firm in his constituency that provides the Torpedo-handling system for the type 23s. That firm will have welcomed the recent announcement of an order for a further three of these ships.

Mr. Ashdown: When the Minister visits north Devon will he consider the matter of British equipment and pay a visit to RAF Chivenor, which is waiting for the SAR Westland helicopters that have been on order for two years? The Minister promised that this order would be taken care of shortly after the new year. Surely that time has arrived. The Minister should remember that Westland will hold its annual general meeting on 13 February. An order announced now would not only fulfil the SAR requirements but also be very welcome to Westland.

Mr. Clark: I am glad to confirm that an announcement about this order will be made shortly. Important though the right hon. Gentleman is, he is not yet in a position to issue invitations to visit Royal Air Force stations.

Dame Janet Fookes: If my right hon. Friend is going on a tour I hope that he will not forget our mutual home territory on Plymouth, which is very anxious indeed to maintain close links with the armed services. It has provided excellent service in the past, and wishes to do so in the future.

Mr. Clark: I visit Plymouth every weekend.

Plutonium

Mr. Skinner: To ask the Secretary of State for Defence if there are currently any contracts with the Atomic Energy Authority for research into the fabrication of weapons components using plutonium; and whether any such work has been carried out at Harwell.

Mr. Kenneth Carlisle: There are no contracts with the AEA for research into the fabrication of weapons components using plutonium. We do place contracts with AEA, which exploits its expertise in a range of matters, including plutonium handling.

Mr. Skinner: Why is it that £40 million is being spent on the 220 building at Harwell? Does this have something to do with the transfer of work on Trident warheads from Aldermaston, which is not big enough? Is not the cry of every potential bomb-making third-world country that its nuclear work is entirely civil, even though it is, in fact, for defence purposes? It is time Britain gave a lead by stopping its nuclear proliferation.

Mr. Carlisle: The hon. Gentleman excites himself without cause. Most of the work that is done at Harwell is for the civilian sector. Indeed, the refurbishment of the 220 building results from AEA's commercial considerations and is not necessitated by Ministry of Defence contracts. The answer to the hon. Gentleman's question about the Ministry is the one that I have just given. Far more


interesting is whether the hon. Gentleman and his Back-Bench colleagues support Labour's new nuclear defence policy—so far as anyone can understand it.

Mr. Marlow: My hon. Friend will be aware of reports coming out of Russia of grave concern about the maintenance and decommissioning of the vast ex-Soviet nuclear stockpile. Is it possible for us to provide facilities, skills and help from the Atomic Energy Authority to help them with that difficult problem?

Mr. Carlisle: My hon. Friend raises a very important point. Safety is always paramount to us in those matters and we are in discussion with them to see how best we can help.

Territorial Army

Mr. Wallace: To ask the Secretary of State for Defence what representations he has received about the future strength of the Territorial Army in Scotland.

Mr. Archie Hamilton: A number of representations have been received.

Mr. Wallace: Can the Minister confirm that they included representations to ensure that any rundown in the Territorial Army in Scotland will not mean there being insufficient units in Scotland, to the point at which the TA will lose the goodwill of the scattered communities, particularly in the highlands and islands, in terms of recruitment? Did he also receive representations about 15 Parachute regiment to the effect that it should be allowed to continue at its five locations in Scotland? Will he take this opportunity to confirm that sufficient resources will be made available to ensure that full establishment is maintained at each of those locations for men and resources, for training and administration?

Mr. Hamilton: I am always fascinated to hear Liberals going on about resources being made available for defence, when they are committed to cutting them by 50 per cent. by the end of the century. I am never sure how their inquiries fit in with that commitment.
The reduction in Scotland will be 13 per cent. compared with a United Kingdom average of 17 per cent. So Scotland is being treated well under the measures.
The geographical spread will be very much a question of how the highland and lowland TAVRAs—the Territorial Army volunteer reserve associations—decide to allocate their resources. My hon. Friend has made it clear that no willing volunteer will be turned away and that anybody who wants to continue to serve with the TA will be able to do so, maybe not with the unit in which he is now serving, but with another unit.

Mr. Bill Walker: Does my right hon. Friend agree that Scotland's contribution to the armed forces, including the TA, far exceeds its proportion of less than 9 per cent. of the United Kingdom population? That has been recognised by the Government. That is why Scots who are interested in military and other matters will always be best served by a Conservative Government.

Mr. Hamilton: That is absolutely right. It is amazing what we hear from Opposition Members, when they intend to cut defence expenditure. The effect that that

would have on Scottish defence would be devastating in terms of procurement and the employment of people in the armed forces.

Dr. Reid: Is it not a fact that on 3 July last year the Minister of State told my hon. Friend the Member for East Lothian (Mr. Home Robertson) that the recruitment figures for individual battalions in Scotland would not be released on the ground of security, yet when it suited the Secretary of State's purpose, he was prepared to release figures showing 67 per cent. recruitment to 15 Parachute regiment? Can he therefore confirm that either the Secretary of State has breached the security rules or that the excuse of national security has been used merely to cover the fact that the Government made the decisions on political rather than on military grounds? Is that not why there is so much concern in Scotland among supporters of the regiment? Is he aware that there will be a wide welcome for my assurance that an incoming Labour Government will review each and every one of these decisions to ensure that the size and structure of the regiments in Scotland and throughout the United Kingdom reflect our military needs, and not the political expediency of the Tory party?

Mr. Hamilton: If the hon. Gentleman is suggesting that a review of defence by an incoming Labour Government, should we happen to have such an Administration, would mean more money being spent on defence, I am a Dutchman.

Defence Hot-lines

Dr. Michael Clark: To ask the Secretary of State for Defence what offer of assistance he has given to the member states of the former Soviet Union to assist in establishing defence hot-lines.

Mr. Tom King: My right hon. Friend the Prime Minister agreed with President Yeltsin in London last week that a secure direct telephone link between No. 10 and the Kremlin should be established. I also discussed with Marshal Shaposhnikov the ways in which we could establish clearer links between us and our staffs. I hope to make a further announcement about that very shortly.

Dr. Clark: Does my right hon. Friend accept that unambiguous communication is just as important now as it was during the cold war, and perhaps even more important? Will he also accept that the newly independent states of the former Soviet Union may from time to time have some apprehension, and that there may be need to give them reassurance?

Mr. King: That is precisely why my right hon. Friend the Foreign Secretary visited each of the nuclear republics of the former Soviet Union. With regard to the need for direct and close contact, I do not think that we could have had a clearer example of that than the visit of President Yeltsin and the very straight talking between my right hon. Friend the Prime Minister and the president. In one very short and clear comment, President Yeltsin demolised all the arguments of the Labour party that somehow our deterrent is an obstacle to the reduction of the nuclear arms of the super-powers.

Oral Answers to Questions — PRIME MINISTER

Engagements

Sir George Gardiner: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February.

The Prime Minister (Mr. John Major: ) This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Sir George Gardiner: Does my right hon. Friend agree that to suggest that there is one kind of school that can cater for the needs of all kinds of pupils is an example of the naive theorising that has caused so many problems in education, which we are seeking to address today? Will he continue to press for diversity in education through grant-maintained schools, through city technology colleges and through local management of schools responsive to parents' wishes?

The Prime Minister: I agree with the premise underlying my hon. Friend's question. We will certainly continue to encourage diversity through grant-maintained schools, CTCs and locally managed schools, all of which give greater opportunity and choice to parents and pupils. We will continue to offer that choice.

Mr. Kinnock: At the time when the Prime Minister said that if his policies
were not hurting, they were not working,
did he realise that those policies would cause the longest recession since the 1930s?

The Prime Minister: We have taken action to ensure that we come out of this recession in a way that will ensure sustained recovery. As the Governor of the Bank of England said only yesterday,
the conditions are now in place to underpin a … sustained recovery.

Mr. Kinnock: Having caused the longest recession since the 1930s, does the Prime Minister agree with the words of his right hon. Friend the Chancellor of the Exchequer, who said last month:
the policy would not have been different even if we had known the outcome."?

The Prime Minister: Caused the recession?—Did we cause it in the United States, in Sweden, in Japan, in Australia, in New Zealand? If the right hon. Gentleman believes all that, he is certainly not capable of leading his party, let alone this country.

Mr. Kinnock: There is no question of doubt that this Government caused the recession in this country. Since the Prime Minister made the statement that I quoted, nearly 1 million jobs have been lost, there have been over 100,000 repossessions and 80,000 businesses have been lost, in those two years. This Government caused the recession, they continued the recession, and now they have not got a clue how to get out of the recession.

The Prime Minister: What the right hon. Gentleman has to say—[Interruption.]

Mr. Speaker: Order.

The Prime Minister: What the right hon. Gentleman has to say is economic illiteracy. If the right hon.

Gentleman is genuinely concerned about recovery, what does he think that higher taxes would do to it? What does he think that his jobs tax would do to it? What does he think that his investment tax would do to it? What does he think that his minimum wage would do to it? The policies which the right hon. Gentleman pursues would mean perpetual recession for this country.—[Interruption.]

Mr. Speaker: Order. Will hon. Members please settle down?

Chancellor Kohl

Mr. Hunter: To ask the Prime Minister when he will next meet the Chancellor of Germany; and what issues he intends to discuss with him.

The Prime Minister: Chancellor Kohl and I are in frequent contact by telephone to discuss matters of mutual interest. I expect to meet him again soon, but I have no immediate plans to do so.

Mr. Hunter: Has my right hon. Friend noticed the extent to which the German economy has suffered from the worldwide slowdown and the fact that German output has decreased during the past two months for which figures are available? Does not that conclusively show that economic difficulties are not confined to the United Kingdom, as the Opposition try to claim?

The Prime Minister: My hon. Friend's question is more apposite than he might have imagined. He is entirely right. I have noticed that fact, even if the Opposition have not. Again, the Governor of the Bank of England noted yesterday that the recession has proved unexpectedly persistent in north America and that in continental Europe, Japan and elsewhere economic activity has slowed and unemployment has begun to rise. Only the Opposition adopt their typical stance. They ignore other countries' difficulties and concentrate solely on those in this country, to the damage of our interests.

Mr. Radice: After the two opt-outs negotiated by the Prime Minister at Maastricht, does Chancellor Kohl still think that the Prime Minister is a good European?

The Prime Minister: The hon. Gentleman had better ask Chancellor Kohl that question. I have enjoyed the closest possible co-operation with Chancellor Kohl in the past year and I intend to continue to do so in the same capacity in years to come.

Engagements

Mr. Lee: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Lee: The massive growth at Manchester airport since the Government have come to power—a 1,100 per cent. increase in fixed assets—has given a tremendous boost to the economy and pride of the north-west. Indeed, the north-south divide has now ceased to exist as an issue. When my right hon. Friend next has a free Saturday, will he fly up to Manchester, look at what has been achieved by the airport, and then pop over to Old Trafford to watch a


first-class football side in action? It will win the first division championship, just as my right hon. Friend will certainly win the next general election.

The Prime Minister: My hon. Friend will forgive me if I do not respond to one part of his question. Manchester airport, however, is a success story. It has benefited especially from the growth in the liberalisation of air services and, as a result, three times as many passengers now use the airport as when the Government came to office. That is a direct result of liberalisation introduced by the Government. The concept of a north-south divide was always too simplistic and sweeping. Many areas of prosperity and some of difficulty exist in each and every part of this country—[Interruption.]

Mr. Speaker: Order. Let us have less barracking.

Mr. Cohen: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Cohen: Is the Prime Minister aware that, in my constituency of Leyton, unemployment has risen by 84 per cent. in the past 18 months? As last night the Governor of the Bank of England backtracked over the duration of the slump, will the Prime Minister now institute an urgent programme of recovery? Failing that, will he explain to my unemployed constituents why the Government consider them a "price worth paying"?

The Prime Minister: Clearly, the hon. Gentleman was not listening a few moments ago when I quoted directly the Governor of the Bank of England saying that the conditions necessary to underpin a sustained recovery are now in place.

Mr. Allason: Will my right hon. Friend confirm that a review is to be undertaken of the use by the security and intelligence agencies of informants and other sources? When he receives that final report, will he bear in mind the fact that the security intelligence agencies rely on the use of informants, and the intelligence that they receive will never be any good unless a measure of protection can be granted to those sources?

The Prime Minister: We do, of course, constantly keep these matters under review and I believe that it is important that we continue to do so.

Mr. Winnick: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Winnick: Is the Prime Minister proud of the fact that since the Government came into office in 1979 nearly 2·5 million full-time jobs in manufacturing have been lost, 34 jobs for every hour this wretched Government have been in office? In view of the devastation, the unemployment and the misery caused to our people, is it any wonder that the Prime Minister is so reluctant to hold the general election?

The Prime Minister: The hon. Gentleman is joining the Opposition trend of seeking to talk down what manufacturing and other industries are doing. He should remember that export volumes of manufactured goods

grew faster than in the United States throughout the 1980s, that manufacturing grew faster than in France or Italy during the 1980s, and that Britain exports a larger proportion of its national product than Japan, a point recognised by even the Scottish National party.

Mrs. Peacock: Will my right hon. Friend join me in sending congratulations to a Yorkshire manufacturing company, Spring Ram plc, which at the end of the month will open two new factories in my constituency, creating 400 new jobs, which is at present building two new factories in Barnsley which will create 400 new jobs, and which has a plan to create 1,100 new jobs in Bradford over the next four years?

The Prime Minister: I am delighted to send my congratulations to my hon. Friend's constituents. There are, of course, many other companies up and down the country which are similarly investing and growing, and laying the foundation for prosperity in the 1990s.

Mr. Carr: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Carr: Can the Prime Minister tell the House how he squares his vision of a classless Britain with the experience of a constituent of mine from Fulwood, who was told last May that she needed a hip replacement but that she would have to wait 14 months for the operation under the national health service, and who was told that she could have had the operation immediately had she been able to cough up £4,300?

The Prime Minister: There were no hip replacements available just a few years ago. It is now a relatively routine operation available in the national health service. Hip replacements are becoming more widely available month after month. That is the direction in which we must go to provide the best health service, the best opportunities and the best element of the classless society that I have talked about.

Mr. Norris: Does not my right hon. Friend agree that the last thing that business needs is for business rates to be brought back under the control of uncapped, loony Labour authorities who will send rates sky rocketing, as they did during the early 1980s? Will he give the House a pledge that such a crazy proposal will never be included in a manifesto issued by the Conservative party?

The Prime Minister: I can give my hon. Friend that undertaking. It is well known to every hon. Member that under the old system, councils could put up rates by more than the rate of inflation. They did and, among other evils, they forced many jobs out of inner city areas by doing so. Those who doubt that might remember the rate rise of Labour-controlled Ealing council of 57 per cent. in 1987. They might also recollect the wriggling of the hon. Member for Dagenham (Mr. Gould) on television the other day on precisely that problem. It would be a problem, he said. It would be a problem not just for the Labour party but for business men up and down the country.

Mr. Andrew Welsh: To ask the Prime Minister if he will list his official engagements for Tuesday 4 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Welsh: Since the Government have supported independence in Russia, Lithuania and other parts of the world, when the people of Scotland democratically and peacefully vote for independence, what will the Government say to them?

The Prime Minister: This Union has served both Scotland and England well, and I would not wish to see it undermined. The proposals of the Labour party, the Liberal Democratic party and the Scottish National party would undermine that relationship that has served us so well in the Union. Devolution is not just a matter for Scotland; it is a matter for the whole United Kingdom. If an Assembly were given tax-raising powers, how would that fit in with the other fiscal arrangements? What would the increased taxation do to prosperity in Scotland? The hon. Gentleman should put a fair proposal before the Scottish people, not the half-baked one that he has made.

Mr. Gregory: Will my right hon. Friend—[interruption.]

Mr. Speaker: Order. The hon. Gentleman has not yet asked a question of the Prime Minister.

Mr. Gregory: Will my right hon. Friend confirm that the Government will continue as the party of denationalisation, and confirm to the electorate of York that the Conservative party will not take away the shares of those who have invested in Northern Electric, British Telecom and other such denationalised companies?

The Prime Minister: I can give that assurance to my hon. Friend. The denationalisation programme has been good not only for the consumer, but for share owning and the improvement of both investment and wealth in this country. We believe in those propositions and we shall continue to support them.

Mr. Ieuan Wyn Jones: To ask the Prime Minister if he will list his official engagements for Tuesday 4 January.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Jones: I am sure that the Prime Minister will have enjoyed reading the Western Mail last Saturday, where he will have seen the results of a telephone survey showing that the people of Wales now support the setting up of a Welsh Parliament by a margin of four to one. When will the Prime Minister acknowledge that the aspirations of the Welsh and Scottish people cannot be sidelined for ever, and when will Parliament act?

The Prime Minister: I seem to recall that there was a referendum once before on devolution in Wales when there appeared to be a majority in favour. But the reality was that the referendum showed that there was no majority, and the people of Wales recognised that it would be in the best interests of their country and the United Kingdom to sustain the present arrangements.

Security Forces

Mr. Kevin McNamara: On a point of order, Mr. Speaker, on matters appertaining to the rule of law, the primacy of the police and confidence in the security forces in Northern Ireland? You will recall, Mr. Speaker—

Mr. Speaker: Order. That matter is for the Government, not me.

Mr. McNamara: Mr. Speaker, you will recall that at Question Time last Thursday the Government were twice asked to make a statement on the subject at the conclusion of the Nelson trial. I had privately written to the Secretary of State about that. The matters related to the honesty and integrity of the British Army, connivance in terrorist offences, the role of the police and security forces, and plea bargaining to prevent full public scrutiny of the issues in the House and before the British public.
May I ask you, Mr. Speaker, to seek some way to force, make, persuade or otherwise cajole the Secretary of State for Northern Ireland who has responsibility for such matters to make a statement to the House?

Mr. Speaker: I have received no request for a statement, but the hon. Gentleman's point of order will have been heard by those Ministers with responsibility for such matters.

WELSH AFFAIRS

Ordered,
That the Matter of education in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.—[Mr. Sackville]

Caravan Sites (Amendment)

Sir Michael McNair-Wilson (Newbury): I beg to move,
That leave be given to bring in a Bill to amend Part II of the Caravan Sites Act 1968; to make further provision in respect of encampments of travelling people; and for connected purposes.
I am asking—[interruption.]

Mr. Speaker: Order. Will hon. Members who are not remaining for the ten-minute Bill leave the Chamber quietly, particularly those below the Gangway?

Sir Michael McNair Wilson: I ask the House to give my Bill a First Reading, conscious that many hon. Members also face problems arising from the illegal encampment of people who may be gipsies, but, who, as in my constituency, often belong to other groups variously titled —hippies, travellers, new age travellers, tinkers, dropouts, didicoys and peace people. I submit that the Caravan Sites Act 1968 is no longer relevant to meet the difficulties that such people create.
The ineffectiveness of the present law was vividly illustrated in west Berkshire recently when we faced the encampment of people who described themselves as new age travellers and who decided to park 20 vehicles illegally on a county council byway. The local people were infuriated by the camp and asked the police to move the travellers on. The police demurred on the ground that, as the county council had not designated a site according to part II of the 1968 Act, there was nowhere for the travellers to go. That prompted me to write to Berkshire county council asking when it intended to designate a site in the west of the county to meet the travellers' needs. The council responded that the Act referred only to sites for gipsies and that, as the travellers were not gipsies, the council had no responsibility for the matter. I then wrote to the council asking how it identified a gipsy from a traveller, but I did not receive an answer.
Strictly speaking, the county council is right. Within the strictest interpretation, the 1968 Act applies to gipsies and not to travellers. It seems to me that the Act should be amended, the word "gipsy" dropped, and the phrase—suggested, I think, by the National Gipsy Council—
persons of a nomadic way of life
substituted. At the very least, it would mean a reappraisal of the numbers of people involved in travelling, and thus a reassessment of the number of sites required. The figure of 11,544 gipsy caravans given in 1990 could increase dramatically, and the sooner that we know the scale of the problem, the sooner we can do something about it.
Despite the fact that the 1968 Act is now 24 years old, the Department of the Environment has set no time limit within which county councils must meet their statutory responsibility to designate sites. That would be another requirement of my Bill. Every county should have at least one site, and I suggest that that should happen within the next 12 months.
I go further. The number of people who have taken up a nomadic way of life has increased, and it is probably still increasing. I do not know why they choose that way of life, but that is their right in a free society and we must recognise it. If we are to avoid the endless aggravation that such people as travellers cause virtually wherever they go, the illegality of their encampments, the mess and rubbish that they leave behind, their lack of sanitation, and the fear

of local people that travellers pay little attention to the law, cut timber at will, and poach—in other words, if we are to create some measure of harmony between modern nomads and the community—local authorities should be required to appoint a travellers' liaison officer whose task, much like that of community relations officers, would be to liaise with travelling groups, farmers and their representatives, such as the National Farmers Union, local land owners, and the police. I believe that some counties already have such a person.
In turn, such groups of interested people, working with a local authority, could seek to create a pattern of short-stay transit sites, inconspicuous to the public but maintained by the local authority for travellers. Travelling groups should be able to discover from the local authority where sites are located, and those refusing to use them could be made subject to severe fines.
Clearly, the size of transit sites would vary according to the neighbourhood, but at least some should be able to cope with large vehicle convoys, such as those which make their way to Stonehenge, or which have over the past two years chosen the common around Hungerford as a weekend site.
Present police powers need revising. Currently, policing illegal encampments is a costly business. A large site can tie down as many as 100 constables and cost tens of thousands of pounds, yet the police have limited powers. Generally, they use section 39 of the Public Order Act 1986 to move people on, but that legislation does not apply to vehicles, animals, or the travellers' other belongings. As the assistant chief constable of Thames Valley wrote in a recent letter to me:
It follows therefore that if we were to exercise a power of arrest in circumstances which warranted it, then the families of the persons arrested would still be able to remain with their property on the land.
It was put to me that there should be a new offence of aggravated trespass on land to meet that problem. As matters stand, a district council can obtain an eviction order from a local court when dealing with illegal encampments on common land, but for the police to move illegal encampments from private property requires a much more drawn-out procedure. I know that the police would welcome a simplified court order system.
I wonder whether showmen's vehicles, and the right or otherwise to park them at the side of the road, really belong in the 1968 Act as it is presently drawn.
I have outlined some of the changes to present legislation that, in my opinion, could bring some order to a situation that is rapidly getting out of control. I hope that it is clear from my remarks that the law should strike a new balance between the obvious rights of ordinary people living in towns and villages to be spared the nuisance, aggravation, and hooliganism associated with illegal encampments and the fact that many thousands of people prefer a nomadic way of life—and that simply to try to move them on to somebody else's patch is no solution. Quite simply, the Act must be amended.

Question put and agreed to.

Bill ordered to be brought in by Sir Michael McNair-Wilson, Sir Anthony Durant, Sir Patrick McNair-Wilson, Mr. Robert G. Hughes, Mr. Mark Wolfson, Mr. Tim Smith and Mr. John Watts.

CARAVAN SITES (AMENDMENT)

Sir Michael McNair-Wilson accordingly presented a Bill to amend Part II of the Caravan Sites Act 1968; to


make further provision in respect of encampments of travelling people; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 14 February and to be printed. [Bill 64.]

Local Government Finance

Mr. Speaker: In view of the large number of right hon. and hon. Members who wish to participate in the debate, I propose to put a 10-minute limit on speeches between 6 pm and 8 pm. I hope, however, that those who are called before and after those times will bear the limit in mind, so that all who wish to speak may be called.

The Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move,
That the Revenue Support Grant Report (England) 1992–93 (House of Commons Paper No. 188), a copy of which was laid before this House on 24th January, be approved.
It may be convenient also to consider the following motions:
That the Revenue Support Grant Distribution (Amendment) (No. 2) Report (England) (House of Commons Paper No. 190), a copy of which was laid before this House on 24th January, be approved.
That the Population Report (England) (No. 3) (House of Commons Paper No. 189), a copy of which was laid before this House on 24th January, be approved.
That the Special Grant Report (No. 3) (House of Commons Paper No. 191), a copy of which was laid before this House on 24th January, be approved.
Many of us have taken part in these annual debates before, but they should not be seen as any sort of ritual. The House should explore thoroughly and carefully the allocation of £33 billion of taxpayers' funds: that is the element of Government support for some £42 billion of local authority expenditure.
It is appropriate on occasions such as this to remind the House of the difference between the Labour party's approach to taxation and expenditure levels, and that of the Government. We know from long and bitter experience that high levels of taxation are the hallmark of the Labour party in national government and that rising taxation levels are characteristic of that party in local government.
This year, the average community charge is some £60 higher in Labour-controlled metropolitan boroughs than in those controlled by the Conservative party. In London, the gap is even wider. It is exactly the same story in the shire counties: average charges are £80 higher in Labour districts than in Conservative districts. In independent and Social and Liberal Democrat-controlled authorities, they are £37 higher. This is a national pattern, which both the House and a wider audience will no doubt wish to bear carefully in mind.

Mr. Barry Field: Last year, the Isle of Wight received a higher settlement than any other shire county in England. The authority has nearly £3 million on its balances, but the Liberal Democrats are considering cutting £1·5 million from the education budget—although, when they fought the last county election, they ran down the county balances to £250,000 and ignored the advice of the district auditor. I wonder whether my right hon. Friend could spare the time to join me in a rally and march in Newport, Isle of Wight, this weekend, when we shall go to county hall to protest to the Liberal Democrats about this exhibition of sheer political spite.

Mr. Heseltine: That is a most generous invitation, I must say. I feel torn between two options. Perhaps I can combine making a speech in Eastbourne on Saturday to the Young Conservatives, the largest political youth


organisation in the country—we shall also have to deal with the problems caused by Liberal Democrats in the House, if only temporarily—with a dash across country to support my right hon. Friend the Secretary of State for Defence in his constituency, and a detour to that of my hon. Friend the Member for Isle of Wight (Mr. Field).
On mature reflection, that will be stretching the ingenuity of the transport infrastructure in this country further than is credible, despite the remarkable improvements in that infrastructure for which the Government, alone, are responsible. I must leave it to my hon. Friend the Member for Isle of Wight to use his customary eloquence to put the case, which is obviously a formidable one. I look forward to reading the coverage in the national and local press, which I am sure is well deserved.
Where was I?

Mr. Dennis Skinner: Why does not the right hon. Gentleman stand against the grey man?

Mr. Heseltine: On the rare occasions that the hon. Member for Bolsover (Mr. Skinner) stands to say anything, he seeks to cause the maximum possible trouble for his party, which it claims has abandoned all the political views that the hon. Gentleman, at least, has the integrity still to advocate.

Mr. Skinner: Unlike the Secretary of State, I have never stood against the leader of my party. I was not one of those who decided to act as a stalking horse so that the Ken Barlow replica could get the job, turning out the previous Prime Minister like a dog in the night. The net result is that the right hon. Gentleman has finished up with the poll tax brief, which he did not want. He begged for the Chancellor of the Exchequer's job and was kicked into touch.

Mr. Heseltine: I am sorry to have bothered the hon. Gentleman. He should reconsider his position. By standing against the leader of the Labour party, he would cause exciting consequences for this country. If he were the leader of the Labour party, at least we would know that he was saying the things that most of his supporters still believe. We would know where we are and we would find it easier to keep the Labour party in opposition than we will otherwise. I do not want to trespass on your generosity, Mr. Speaker, by straying from the important revenue support grant debate.

Mr. John Greenway: Before my right hon. Friend tours the entire country from the Isle of Wight to Basildon, may I bring him back to the point that he was making? Whether we are dealing with metropolitan authorities or shire districts, Labour authorities set community charges that are substantially higher than in Conservative-controlled areas, and that is as true in the north as it is in London. Does my right hon. Friend agree that the low community charges set by Wandsworth and Westminster are proof of the generous revenue support grant settlements for all inner London boroughs, which are partly subsidised by the settlement for the shire districts represented by the Conservative party?

Mr. Heseltine: My hon. Friend is right. As I have made clear, we have provided an additional 7·2 per cent. cash to support local authority expenditure in the coming year

when inflation is just over 4 per cent. That is a considerable real-terms improvement in the support for local authority services. It is characteristic that, despite the additional support from the Government, the overall level of charges in all classes of authority will be significantly higher in Labour-controlled authorities than in Conservative-controlled authorities. Interestingly, more money being spent is not the same as people getting a better standard of service.

Mr. Dennis Turner: The right hon. Gentleman talked about a 4 per cent. uplift for all authorities next year. Would he care to tell us about Wolverhampton's predicament? We will have to take £15 million from our budget, cut hundreds of jobs and reduce services that have been built up patiently over many years. We have an uplift of 3·5 per cent. when inflation is 4 per cent. How can my authority balance its books and do what it should for the people of our town, when the Government are not granting it sufficient resources to maintain the level of services? How can you say that the people of Wolverhampton—[Interruption.] I shall finish, Mr. Speaker, because this is important for the people of Wolverhampton. They want to know why the Government are not supporting them. We have the—

Mr. Speaker: Order. The hon. Gentleman must take his chance later in the debate.

Mr. Turner: The people of Wolverhampton will suffer as a result of the right hon. Gentleman's policies.

Mr. Speaker: Order.

Mr. Turner: I apologise, Mr. Speaker.

Mr. Speaker: Thank you so much.

Mr. Heseltine: I am sure that the hon. Gentleman will be pleased to know that the West Midlands police authority will receive an increase of about 15 per cent. in next year's allocation—that is an important concentration of support where people care most about the quality of service that they receive.
I was going to make the point that high community charges and high expenditure levels do not necessarily mean that the quality of service is high. That is clear from the analysis. Lambeth has one of the highest community charges in the country, but its cumulative rent arrears are now more than £17 million. That means that £17 million which should have been spent on maintaining the local authority housing stock is not being spent, because the local authority has not collected it. It is another example of inefficient management denying local authority tenants the service to which they are entitled.
Haringey's rent arrears are the equivalent of almost 20 per cent. of its rent roll—

Mrs. Alice Mahon: Will the right hon. Gentleman give way?

Mr. Heseltine: No.
All analyses show the same disregard for the quality of service, although the levels of expenditure are often very high. I have been less than impressed by the hon. Member for Dagenham (Mr. Gould) during the past few days. He has been trying to suggest that one can make easy comparisons between one authority and another. He indulged in a very selective process and produced a


number of statistics to try to show that some Labour authorities spend more than some Conservative-controlled authorities on some services.
That reflects only the fact that Labour controls some authorities where there are significant levels of need and the Government, through the standard spending assessment system, provide encouragement to meet that need. Therefore, it is not surprising that some Labour authorities spend more in areas of need.

Mrs. Maureen Hicks: Will my right hon. Friend give way?

Mr. Heseltine: That is precisely what the Government intended should happen.

Mr. Harry Barnes: What about meeting needs in North Derbyshire or South Derbyshire?

Mrs. Hicks: Is it not difficult for my right hon. Friend to come to the aid of Wolverhampton in the full knowledge that its authority has more than £5 million of rent arrears, numerous empty council houses and 10,000 surplus school places? Although we hear what the hon. Member for Wolverhampton, South-East (Mr. Turner) says, is it not a difficult situation for my right hon. Friend to comprehend?

Mr. Heseltine: My hon. Friend's point seems to be a most telling case, with which the hon. Member for Wolverhampton, South-East (Mr. Turner) should deal. It is very important, but it is perhaps not a debate which should be conducted over my head during my introductory speech.
I was intrigued to discover that the hon. Member for Dagenham alleges that the collection cost of 1 tonne of rubbish is £39·38 in Wandsworth and £16·62 in Haringey, but I understand from inquiries in Wandsworth that that figure is for collection and disposal—£30 per tonne for disposal alone under an old expensive contract inherited from the borough. The House will by now have guessed from where the authority inherited that contract—it was the old Labour-controlled Greater London council.
The most interesting point in the analysis by the hon. Member for Dagenham, in which he sought to produce figures to prove that Labour was more effective than others on an independent analysis, is why he does not therefore bring pressure to bear on Labour-controlled authorities, especially in London, which do not provide up-to-date returns on which their cost analysis can be compared. It is obvious that the hon. Member for Dagenham will not do anything to encourage Labour authorities to keep their returns up to date, so that their analysis of spending can be known to their electors and to a wider public. I can understand why. Those authorities are the ones which do not collect rents, which did not collect the rates and which do not collect the community charge.

Mr. Harry Barnes: Will the Secretary of State give way?

Mr. Heseltine: I must confess that I understand that the hon. Gentleman is a non-payer of his community charge. I can see no case for a Secretary of State giving way to him when he advises his constituents that they should not maintain the law of this country.

Mr. Barnes: On a point of order, Mr. Speaker. The statements made by the Secretary of State are absolutely incorrect. [HON. MEMBERS: "Apologise."] He should give me a chance to talk about North East Derbyshire. It is a Labour-controlled authority—

Mr. Speaker: Order. Is this a point of order for me? If the hon. Gentleman is patient, he may get the chance to talk about North East Derbyshire later in the debate.

Mr. Heseltine: If the hon. Gentleman is now advising people to pay their community charge, I apologise unreservedly.

Mr. Harry Barnes: On a point of order, Mr. Speaker.

Mr. Speaker: The Secretary of State has now given way to the hon. Gentleman. I would far rather that he put his question to the Secretary of State than to me.

Mr. Barnes: I never advised people not to pay their community charge. I might not have paid my own for a certain period, and there are strong arguments and analyses in connection with that, which I have explained in the House on numerous occasions. That chap over there knows nothing about them.

Mr. Heseltine: Do I understand that the hon. Gentleman's argument is that if he did not pay his own community charge—I believe that he said he would not do that—

Mr. Barnes: Rubbish.

Mr. Heseltine: Ah. Having said that he would not pay and having given the worst possible signals, under pressure he has now given way and changed his mind. It sounds to me like the worst possible deal.

Mr. Barnes: Will the Secretary of State explain why the standard spending assessment for North East Derbyshire places it 365th out of 366 authorities in England? It receives only £81 per head for poll tax payers in the area by way of grant, whereas other authorities receive two or three times that amount. If the right hon. Gentleman wants a discussion later about the principles of non-payment and why hon. Members may not have paid because of the damage done to the electoral register, that is another matter.
Will the right hon. Gentleman give an answer about the position of North East Derbyshire? It is not a well-heeled authority, yet it is at the bottom of the league in terms of the money that it is allowed to spend and the amount of grant that the Government provide.

Mr. Heseltine: I was trying to hear whether the hon. Gentleman paid his community charge because he was taken to court or whether it was because he was convinced that the case that he first advocated was wrong. He has not made that position clear to the House. The House would like to know whether the hon. Gentleman's sudden conversion to keeping within the law came because he changed his mind or because he was taken to court.

Mr. Barnes: The change occurred because there was a vast change in the Government's position. They decided to get rid of the poll tax, although they have not lived up to that promise properly and correctly. A change took place. The action taken by various people, including myself, advanced the position of the Secretary of State and led to the demise of the right hon. Member for Finchley (Mrs.


Thatcher) as Prime Minister. She was destroyed by the flagship of the poll tax. No one else on the Conservative Benches has produced arguments to explain why they wish to get rid of the poll tax and introduce a council tax in its place.

Mr. Heseltine: The hon. Gentleman is being more than frank with the House. In effect, he is arguing that it is perfectly legitimate to defy the law as long as one gains by doing so. I must tell the hon. Gentleman that his is exactly the sort of case that led to authorities' inability to collect the community charge on the scale that was appropriate. It was a deliberate decision and strategy of some Labour Members that they would pursue that policy, and it does not lie in their mouths now to blame the Government for the effects of that deliberate strategy.

Mrs. Edwina Currie: Is my right hon. Friend aware that, in Derbyshire, more than 90 per cent. of the money raised is spent by Derbyshire county council, which subsidises school meals at 1981 prices while sacking teachers, ending swimming lessons and closing libraries, which sends its leader and his cronies on an expensive trip to China while we have fewer police officers than 10 years ago, and which plays around with the pension fund? In those circumstances, is my right hon. Friend surprised that the leader of the council has just announced that he is to resign and that the deputy leader is facing charges? Does my right hon. Friend think that things will improve in future? With "friends" like the hon. Members for Derbyshire, North-East (Mr. Barnes) and for Bolsover (Mr. Skinner), will they not remain exactly the same?

Mr. Heseltine: I am grateful to my hon. Friend. The debate has taken on a most intriguing dimension. Any minute now, the hon. Member for Dagenham will be on his feet asking for higher levels of public expenditure by local authorities. He will be citing—I have no doubt that he will paint a dramatic picture of harrowing cuts—the local authorities' case for an extra £2 billion, over and above the 7·2 per cent. increases that the Government believe to be appropriate.
The House will want to know exactly where the Labour party stands on the issue of increased public expenditure. It does not require a great deal of calculation to work out that, if the hon. Member for Dagenham argues the local authorities' case for an additional £2 billion of public expenditure—which is what the authorities want—that will have to be paid for somehow. The money will not come from extra support from the Government, so it can come only from either 1p extra on income tax or £60 on every poll tax bill. Before the debate ends, we shall want to know which argument the hon. Gentleman advances: does he support the levels of expenditure that the Government believe to be justified or would he put another 1p on income tax or £60 on poll tax to support the local authorities in their request for additional expenditure?

Mr. Richard Tracey: Surely, as reports from the Audit Commission have repeatedly proven, the answer to everything is greater efficiency. That is why Wandsworth is able to return for a second year no community charge while receiving the lowest level of

support of all the inner-London boroughs—hundreds of pounds less than the London borough of Lambeth next door.

Mr. Heseltine: My hon. Friend raises a central issue. The Labour party wants to get rid of the Audit Commission because, for the first time, the commission has put a spotlight on inefficiency in service delivery and on cost per unit of output in a way that is in the end likely to improve efficiency. The moment the Labour party sees genuine discipline imposed on local authorities, it wants to get rid of the agency that is achieving that discipline.

Mr. Tony Banks: I despair of the Secretary of State ever treating local government matters in the House seriously. He reduces everything to drag-out dirty politics, as though he was addressing the Conservative conference.
The right hon. Gentleman is looking around for reasons why local authorities will be asking for extra money. I put it to him that, in the case of the London borough of Newham, it will be because we have to find £6 million this year out of revenue as a result of decisions taken by the valuation court on old rate rebates. That had nothing to do with the London borough of Newham. We are not the only borough in London—or, indeed, elsewhere—facing that prospect. What help can the Secretary of State offer us? Or does he intend to carry on kicking the thing around like a cheap party political football?

Mr. Heseltine: The hon. Gentleman knows perfectly well that he went to see my hon. Friend the Minister for Local Government and Inner Cities yesterday and that they had a discussion about the matter. It would be quite wrong for me to anticipate what my hon. Friend might recommend by way of response. Frankly, when the hon. Gentleman uses that sort of debasing language—I have to use those words—to misrepresent the courteous reception that he received yesterday at the Department of the Environment, he does not encourage my hon. Friend the Minister of State to continue to see people so courteously.
The hon. Member for Dagenham has also been misleading the public about the target community charge for next year. All hon. Members know that the figure that we produced in the settlement provides for standard spending of just over £257. That is not a prediction; it is a target. Efficient authorities will be able to set charges at or near that level, and a significant number of authorities will do precisely that. However, inefficient local authorities will charge more. It is interesting to note that, once again, 18 of the 20 highest community charges this year have been set by Labour local authorities.
The latest evidence is that the gloomy predictions about collection rates that were made by the hon. Member for Dagenham and his colleagues are not being realised. Returns for the third quarter of 1991–92 show that 29 per cent. of the annual budgeted income was collected in that quarter, making a total of 68 per cent. of the budgeted yield for the year. The figure for that quarter is marginally better than for the same quarter in the previous year. There is no reason why, in the year as a whole, local authorities should not improve their overall level of collection. Indeed, the latest figures for 1990–91 show that authorities have now collected 97 per cent. of the budgeted income for that year. As always, however, the average disguises the failure of the worst authorities—and the


worst authorities are Labour authorities. As far as we can see on the latest information, in about nine cases a quarter or more of last year's budgeted income still remains to be collected. I hope that that position will have improved, but that is the latest information available to me.
The essence of the point that I wish to stress to the House is that that problem is not unique to the community charge. The self-same authorities generally had the worst record for rent collection also. They would do no better under "fair rates" proposals of the hon. Member for Dagenham , if they were ever to be introduced. Indeed, they are the same authorities that cannot collect their rents either. One keeps coming back to the same authorities— Lambeth, Haringey, Hackney and Liverpool. Time and again, the same authorities do not collect their bills—whatever those bill happen to be.

Mr. Martin M. Brandon-Bravo: May I take my right hon. Friend briefly back to the figure of £257 that he quoted? I believe that, if it put its mind to it, my authority in Nottingham could achieve that figure —but with one exception. Will my right hon. Friend address the problem that affected all my constituents last year when an extra £44·75 was imposed on them to pay for the slow payers and non-payers who were encouraged in their actions by the Labour Members, and especially by Labour Members such as the hon. Member for Derbyshire, North-East (Mr. Barnes)? I make that point because the neighbouring authority to the city of Nottingham, Conservative-controlled Gedling, imposed only an extra £3·50. That shows clearly that the surcharge had nothing to do with Government legislation but was due entirely to the difference between Conservative and Labour-run authorities. What protection can we give our constituents?

Mr. Heseltine: The simplest solution, as I am sure my hon. Friend will persistently advocate, is to vote those Labour authorities out of office. That is incomparably the best way in which to deal with the issue.

Mr. Allen McKay: rose—

Mr. Heseltine: Please forgive me, but I shall not give way because many other hon. Members wish to speak.
I wish to say a few words about non-payment. The House has heard me say before, and I repeat it now, that there will be no amnesty for non-payers. We are taking further steps to ensure that authorities have the necessary powers for the proper enforcement of the community charge. On 23 January, I announced that we would be extending from two to six years the period during which enforcement proceedings may be commenced. I announced last week that we are moving swiftly to put beyond doubt the admissibility of computer evidence in proceedings for community charge recovery in magistrates courts. We will table amendments to the Local Government Finance Bill, now in another place, to ensure that admissibility.
Last week, the hon. Member for Dagenham put it to me that we should put a short Bill through the House in rapid time to deal with the issue. I considered that offer with fairness and in deference to his position of responsibility as a leading member of the Labour party. When his letter arrived, I spent a great deal of the day exploring all the problems of putting through a Bill of the sort that he had

in mind. He could not, for example, carry all the House with him. There could easily have been filibustering by the Scottish nationalists or who knows what. He could not command a majority in another place and I had to take those issues into account, but I did not dismiss the possibility out of hand.
I was beginning to talk to the business managers about moving in that direction, which could have saved a fortnight of the House's time and would have been possible in the best of all possible worlds. However, I came to the House to find that a principal piece of Government legislation, the Education (Schools) Bill was being subjected to a filibuster. As a consequence, we lost a day's business.
That displays, as clearly as one can, the cynical disregard the Labour party has for proper relations between the Opposition and the Government. They had no intention of enabling us to get our legislative programme through with dispatch. It was done to try to cover up the embarrassment of the Labour party at the refusal of its own members to try to collect the community charge. Therefore, I was not prepared to deal with the matter in the way that the hon. Member for Dagenham suggested.
My Department has written to local authorities about how to proceed in the short period before the Bill which we are amending is enacted and about the position of existing liability orders. In the intervening period, authorities will wish to consult the clerks to the justices about how to proceed. We believe there is no obstacle to authorities continuing to apply for liability orders where they consider that their procedures for the presentation of cases meet the requirements of existing law. I understand that a number of authorities are continuing to do so.
In any event, it is our view that summonses for non-payment of the community charge, with return dates after new powers are in place, can continue to be issued. When cases have been or are adjourned, they can be considered under the new powers when they are in place. Our proposed amendments will not be retrospective, but they will apply in proceedings to enforce payment of the community charge whenever the liability arose, including cases in which a summons was issued before the Local Government Finance Bill takes effect.
Our understanding in relation to liability orders, which have been made under existing powers, is as follows. The new provisions will not in themselves invalidate any order previously made. Local authorities can continue to act on orders which magistrates courts have granted. An individual may of course apply to challenge a liability order in a higher court—for instance, by applying for leave to seek judicial review if the order was granted within the past three months. Each case would need to be looked at separately on its merits. If the only ground on which an individual sought relief was the inadmissibility of computer evidence, and he had not raised the issue in a lower court, it seems unlikely that the court, in the exercise of its discretion, would entertain an application.
I understand that, if it came to a hearing, it is equally unlikely that the court, in the exercise of its discretion, would quash a liability order solely on the grounds of procedural defect if no injustice had been done and the community charge remained unpaid. Let us be clear; we would be dealing with individuals who have failed to pay a community charge properly due and who would be seeking to avoid or delay payment through a technicality.
I hope that hon. Members will believe that, in addressing the legitimate interests of the crucial services provided by local government for the forthcoming year, and having regard to the current levels of inflation and the ability of the Government to afford whatever sum is appropriate, this settlement is one for which they can vote. We believe that it is coupled with a realistic capping regime to contain excessive levels of expenditure. The House will know of the regime that follows the determination by any authority that its budget comes within that capping regime.
The House would do well to support this set of proposals, which I commend. In so doing, it would urge local authorities not to seek to justify higher levels of expenditure, which can only put pressure on their community charge payers and others in the area affected by such charges, but to seek improvements in the output values that they can attain, which are being attained by many authorities of all political persuasions up and down the country.
The settlement that we are finalising today reflects the Government's continuing commitment to ensuring a proper level of funding for local authority expenditure. It provides sufficient resources for local authorities to provide a full range of services at a price that both their charge payers and the country as a whole can afford.

Mr. Bryan Gould: This debate brings us to wearisomely familiar territory, even if our only guide to that territory so far has been a typically rambling and shambling speech from the Secretary of State. It is territory littered with the wrecks of failed Government policies. It is a familiar catalogue of Government mistakes, which have dogged local government for more than a decade, undermined its morale, slashed its resources and virtually extinguished its independence.

Mr. Phillip Oppenheim: Will the hon. Gentleman give way?

Mr. Gould: The hon. Gentleman must be joking.
Last year the Secretary of State had an excuse of sorts. The more generous among us were inclined to say that, in the decade since his first stint at Marsham street, he appeared to have mellowed somewhat. While others pointed the accusing finger at him as the progenitor of the "Whitehall knows best" approach, we tended to point to his attack on the poll tax—the "Tory tax", as I think he called it—and to his robust opposition to universal capping. Even his commitment, at this time last year, to a manifestly inadequate RSG settlement could be excused on the ground that he had inherited the settlement from his predecessor and had had no chance to recast it. A year later, none of those excuses will wash any more.
This revenue support grant settlement is the Secretary of State's settlement; the poll tax bills are his poll tax bills; the capping is his capping; the consequences for local government, disastrous as they are, are consequences that he has willed as a deliberate act of policy. The great centraliser of the early 1980s, the great hostile opponent of the whole concept of local government, is again alive and well in Marsham street. It is little wonder, therefore, that we heard only the merest token of any analysis or defence

of the RSG settlement. The Secretary of State spent the bulk of his speech on a typically wild assault and denunciation of local government in general.
So it is that this RSG settlement shows all the flaws of its predecessors. It is, first of all, simply inadequate. It represents a full £2 billion less than local authorities—I refer not only to Labour authorities but to all local authority associations, including those under Tory control —calculated were needed to maintain services, to take account of inflation and to discharge the new obligations imposed by statute.

Mr. Oppenheim: rose—

Mr. Gould: I shall give way to the hon. Gentleman very shortly.

Mrs. Mahon: Will my hon. Friend give way?

Mr. Gould: I shall give way to my hon. Friend, too.
To justify the settlement, the Government persist in using figures based on calculations that are irrelevant and misleading. They point to a rate of increase over last year's settlement, when everyone knows that last year's settlement was itself inadequate, that the actual level of local government expenditure was much higher.
They base themselves on a rate of inflation of 4£5 per cent., which is lower than the 7·3 per cent. which local government calculates it actually has to face and which is higher than the general rate because of the importance of wage settlements beyond the control of local government.
They fail to take account of demographic changes, of new service pressures, of the impact of recession or of the rise in homelessness. No wonder local government as a whole regards this RSG settlement as unsatisfactory.

Mr. Oppenheim: rose—

Mr. Gould: I will give way to the hon. Gentleman shortly, but I give priority to my hon. Friend the Member for Halifax (Mrs. Mahon).

Mrs. Mahon: Probably because the Secretary of State anticipated the question that I wanted to ask him, he refused to give way to me.
Labour-controlled Calderdale, recently named the second most efficient metropolitan council, has recently given official figures for the loss of rate support grant since 1979. More than £167 million has been lost as a result of RSG cuts under the Conservatives. That represents £13 million a year for each of the 13 unlucky years that the Conservatives have been in office. That is why the area is facing another massive round of cuts, which leaves it unable to build homes for the homeless and explains why we have crumbling schools and face the prospect of the closure of old people's homes. That has nothing to do with councillors but everything to do with the Conservatives removing £13 million a year in RSG in the way I have described.

Mr. Gould: The testimony of my hon. Friend is persuasive because what she tells us about the experience of Calderdale, important and damaging though that has been, is by no means limited to that authority, to Labour local authorities or to local authorities of particular categories. It has been the general experience of local government as a whole, and Conservative-controlled local


authorities are almost as damning in their judgment of Conservative treatment of local government as are my hon. Friends and I.

Mr. Oppenheim: I thank the hon. Gentleman for giving way, and I understand his commitment to positive discrimination in giving way first to the hon. Lady the Member for Halifax (Mrs. Mahon).
If the settlement is really so inadequate, may I ask the hon. Gentleman to give the House an unequivocal commitment significantly to increase funding for local government within two years? Yes or no?

Mr. Gould: I will gladly give the hon. Gentleman a commitment that we shall put an end to the £25 million of taxpayers' money wasted every day on maintaining the poll tax in being. That must be added to the £14 billion of taxpayers' money so far thrown at the poll tax. It is the most breathtaking cheek on the part of the Conservative Members to pretend that, in some way, they are the guardians of prudent management of the taxpayers' money—[Interruption.] This deliberate self-delusion as to the true value of the RSG settlement may convince those who want to be misled, but it cannot alter the real consequences in the real world of reduced services and higher poll tax bills.
The size of the settlement is not the only problem. There is also the question of the distribution of the grant and the whole system of standard spending assessments, a system which even the Secretary of State's predecessor admitted was flawed and needed reform but which has remained unreformed and consequently open to fundamental objection.

Mr. Roger Knapman: Is the £4·2 billion of additional public expenditure that the hon. Gentleman is recommending within the £37 billion already promised, or is it a new and separate promise?

Mr. Gould: The hon. Gentleman must have been asleep at the time of the Budget and Finance Bill last year, when the House appoved that expenditure because it at least made some attempt to redress the short-changing of local government over a long period under the Conservatives.
I was speaking of the flaws of the standard spending assessments. Virtually no one has a good word to say for SSAs. Even the Audit Commission warned that the Government should not underestimate the lack of confidence in SSAs among local government politicians and professions.
Everyone knows that SSAs measure the wrong things. Why, for example, are needs measured but not resources, and why is this done in an arbitrary, capricious and over-complicated way? Why is it assumed that it costs £1,148 per adult to deliver a standard level of service in Manchester, but only £857 for the same standard level of service in Wigan? Why is it assumed that a 300-pupil secondary school in Sheffield needs £300,000 less than a similar school in Wandsworth? 
Why does Barnsley, with all the problems of a declining mining area, receive an SSA ranking it 251st out of 366 English authorities—below that of such supposedly deprived areas as Epsom, Sevenoaks and Bath? Why are so many well-run Labour authorities in the north—Wigan, Barnsley, Doncaster, Rotherham, and so on—victims of the capping axe on the basis of a manifestly inappropriate

set of SSAs? Do Ministers dispute in public what they have admitted in private—that the SSA system discriminates against those authorities?

Mr. Eric Illsley: My hon. Friend has referred to Barnsley, which is 36th out of 36 metropolitan districts. What is his view of a settlement that puts Manchester's SSA 78 per cent. higher than Barnsley's for the provision of a standard level of service?

Mr. Gould: My hon. Friend chooses one more of a veritable myriad statistics which could be adduced. There is a huge range of statistics which show how ludicrous and irrational is the system of SSAs. I pointed out on 26 November that there must be something wrong with a system which concluded that Harrow, with 15·4 days of snow each year, had more snow than Cumbria, with only 12·6 days. At least that nonsense, we understand, has been partially remedied, with two days added to Cumbria's total. But that is only one of the many inconsistencies.
Can either the Secretary of State or the Minister tell us how many local authorities—is it dozens or is it scores? —have been so concerned about their treatment that they have been to see them to try to get their assessments changed?

Mr. Michael Carttiss: I agree with some of the hon. Gentleman's comments about the standard spending assessment; he has made many points which I believe many Conservatives throughout the country would make. Nevertheless, will he find time this afternoon to spell out some of the alternatives which the Labour party might think it could find to improve the situation?

Mr. Gould: We are at least making some progress. I very much welcome the spirit in which the hon. Gentleman not only concedes that there is common ground between us in the criticisms that I am making of the SSAs, but also demonstrated a willingness to learn from the excellent policies that we have published. I will gladly send him a set of the policy documents, which I am glad to say are in great demand by letter writers from all over the country.
It is not just the capricious nature of the system that is unacceptable; it is, I am sorry to say, the scope which the system offers to an unscrupulous Secretary of State to manipulate it for party advantage. It is not just the introduction of criteria, such as foreign visitor nights, which are plainly calculated to benefit Westminster; it is the pattern of the increase in SSAs, with a plain divergence along party lines, that gives real cause for concern. The figures are quite startling in their implications.
For local government in England as a whole, SSAs increased by 21£6 per cent. more for Tory-controlled authorities than for Labour-controlled councils. The figure for shire districts, where the comparison is least affected by differences in the nature of the authorities, is even clearer. The SSA for Tory authorities increased by 24£6 per cent. more than for Labour authorities and the same pattern is found for counties. The only exceptions are metropolitan authorities, where the comparison is impossible because there is only one Tory metropolitan authority, and London, where the rate of increase shows little variation according to political control.

Mr. Heseltine: The House may wish to know that the average SSA for every class of Labour-controlled authority is higher than it is for Conservative-controlled


authorities. The hon. Gentleman is talking about shire districts. Labour-controlled authorities have SSAs which, per adult, are 27 per cent. higher than the average for Conservative districts.

Mr. Gould: The Secretary of State uses a statistic that simply shows that need tends to be greater in inner-city areas served by Labour local authorities, as he pointed out earlier this afternoon. Significantly, he did not deal with the figure that I presented to him. We are not discussing the absolute level of SSAs. The charge that I level against him is that, between the current and the coming financial year, he has sanctioned an increase in SSAs that is nearly 25 per cent. faster for Tory authorities than for Labour authorities.

Mr. Brandon-Bravo: Will the hon. Gentleman give way?

Mr. Gould: I shall give way in a moment, once I have concluded this point.
The pattern revealed by those figures is too consistent and unmistakable to be accidental. The contrast is sometimes breathtaking.

Mr. Heseltine: Will the hon. Gentleman give way?

Mr. Gould: The Secretary of State wants a second bite at defending his indefensible position.

Mr. Heseltine: That allegation amazed me when the hon. Gentleman first uttered it, so I looked up the figures. The most startling discovery was that one of the largest improvements was made in the neighbouring constituency to mine—Labour-controlled Oxford, East—and one of the lowest improvements was made in my district authority.

Mr. Gould: I am delighted that I have at least induced the Secretary of State to look at the figures. I am prepared to concede that the figures that he has just quoted are exactly accurate. However, although that is the second time that he has come to the Dispatch Box allegedly to deal with the point, he has still not denied the basic charge that we level against him.

Sir Anthony Grant: Will the hon. Gentleman give way?

Mr. Gould: No, I am sorry, but I wish to complete the point before I give way.

Sir Anthony Grant: rose—

Mr. Gould: I have not yet made the point, so the hon. Gentleman will perhaps sit down and listen to it for a change.
The conclusion must be that the Secretary of State has found a way, in election year, of providing an advantage to authorities of the right political colour. After all, we are operating in a highly charged, pre-election context and we are dealing with a Secretary of State who is, above all, a ruthless and unprincipled party politician. He could not tell someone the time without warning him that, under Labour, every hour would be reduced to 58 minutes. But even for him, it is a piece of breathtaking cheek that he should seek to link the Labour party with high local government taxation.
What brought lawful citizens on to the streets? What induced Tory councillors to resign? What forced £14 billion-worth of taxpayers' expenditure to be thrown at it? What destroyed the former leader of the Conservative party, the right hon. Member for Finchley (Mrs. Thatcher)? It was the poll tax. The poll tax forced up bills and was one of the most painful aspects of the Government's already pathetic record on personal taxation.

Mr. Heseltine: I suppose that all Members of Parliament are used to being accused of party political chicanery. What worries me is the hon. Gentleman's assault on my competence. He suggests that I have somehow tried to fix the revenue support grant to help the Conservative party. Again, my further inquiries into the matter, in which I am supposed to have been working for the benefit of the Tory party, show that I managed to arrange a situation in which the SSA for Barking and Dagenham is higher than the average for all the Conservative-controlled outer London boroughs.

Mr. Gould: I am glad to say that that is yet one further reason why no doubt I will be returned with an increased majority. Again, for the third time, the Secretary of State comes to the Dispatch Box and makes another irrelevant point, but he does not deal with the central charge, which remains on the table.

Sir Anthony Grant: I want to take up the hon. Gentleman on the point which he made about the shires. He said that my right hon. Friend has been generous to the shires. Cambridgeshire is the one part which I know; the hon. Gentleman knows Cambridgeshire too, because he has been gadding about there quite a lot. Will he explain why, for months on end, the Labour and Liberal parties in Cambridgeshire have been bellyaching about the skinflint nature of my right hon. Friend? What does the hon. Gentleman say about that?

Mr. Gould: With every intention of being well meaning, the hon. Gentleman misunderstood the point that I was making. I was not saying that the Secretary of State had deliberately favoured shire districts. Let me reiterate the point. What I said was that, as between Labour-controlled shire districts and Tory-controlled shire districts, the increase in SSAs was 24·6 per cent. higher in the case of Tory-controlled authorities. We may have made a little progress and got that point across to the hon. Gentleman.

Several Hon. Members: rose—

Mr. Gould: When I am confronted with a barrage of intending interveners, I am less likely to give way.
The significance of the SSA is that it determines the level of grant and therefore the size of the poll tax bill. It is also the basis for applying the cap on spending which will determine the cuts in services which will have to be made by each local authority. That is why the intricacies of the SSA system, which may seem arcane and remote from the concerns of most voters, are of great importance to those self-same voters.
The minds of voters will be concentrated wonderfully on local government finance by the arrival of poll tax bills at the beginning of April. We expect that the Secretary of State will try everything he can to shuffle off the blame for those high poll tax bills on to the local authorities, but we


also know that the voters, by a huge majority, will agree with the Secretary of State in viewing the poll tax as a Tory tax.

Mr. James Paice: rose—

Mr. Gould: I will give way to the hon. Gentleman, but I ought to give notice that I do not intend to deliver the same unstructured mess of a speech as the Secretary of State.

Mr. Paice: I wanted to take up the hon. Gentleman on precisely the point about poll tax bills. In answer to my hon. Friend the Member for Amber Valley (Mr. Oppenheim), the hon. Gentleman said that, if elected to office, he would immediately do away with what I think he referred to as the £25 million a day waste of the poll tax. Bearing in mind that the House has already passed the legislation to abolish the poll tax, and bearing in mind also that the poll tax bills will have gone out and that the financial year will probably have started by the time the general election takes place, is the hon. Gentleman saying that at that stage, with 10 or 11 months of the financial year and the poll tax still to run, he would abolish the poll tax? If so, will he tell the House how he would finance local government for the remaining months?

Mr. Gould: The hon. Gentleman's intervention simply shows how right we and most people are to regret the fact that the opportunity which the Government had to abolish the poll tax for this April was thrown away. I might add that that opportunity was aided by our offer of co-operation on the legislation required to do it, but that offer was turned down.
Many authorities, of whatever political control, will have to make substantial cuts to stay within the cap. That is the consequence of the universal capping which the Secretary of State now supports, in direct contradiction to his earlier and principled opposition to it. Many authorities which have hitherto escaped the threat of capping because their budgets fell below the £15 million threshold will be caught. No one should imagine that councils such as Derwentside or Elmbridge can make the huge cuts in their budgets now demanded of them without great damage being done to services.

Ms. Hilary Armstrong: Is my hon. Friend aware that one of the major reasons that Derwentside's standard spending assessment is so far beyond the needs of that authority is the direct action of the Government in closing the Consett steelworks 10 years ago, which resulted in the local authority working to enable some industrial activity to continue? The chairman of the Tory party continues to say how well Consett is doing. He may like to know that male unemployment in the town is now about 20 per cent., and without the support of local government, the prospects of the town and its surrounding district are exceptionally bleak.

Mr. Gould: My hon. Friend speaks eloquently about the problems of a local authority that is the victim of the combination of capping and inappropriate SSAs in relation to the district's basic economic problems.
The significance of the SSA lies in its implications for the poll tax levels. The poll tax is a sort of residuum: the poll tax payer picks up the bill for whatever expenditure is not covered by another source of income. If central

Government grant is set too low, the poll tax must rise. That has happened consistently throughout the short, unhappy history of the poll tax.
It was originally projected that the poll tax bills would be relatively low, but then the ideologues took charge. The great virtue of the poll tax was always said to be that it would increase accountability. Its impact was deliberately increased by cutting other sources of finance and loading the burden of any further spending on the hapless poll tax payer—the familiar problem of gearing.
Last year, even Ministers took fright at what they had done. They suddenly reversed gear and raised value added tax by 2·5p—a 16·6 per cent. increase—in order to reduce poll tax bills. However, Ministers have still not learnt the lesson that, if they short-change local government by way of grant, the inevitable consequence is higher poll tax bills.
Ministers have now taken such a grip on all aspects of local government finance that they can no longer escape the blame when things go wrong. The Secretary of State decides the amount of grant, central Government set the level of the business rate—and we have heard again today how damaging that has been for businesses, particularly small ones. The Secretary of State for Education and Science decides teachers' pay. The Home Secretary sets the pay for the police and firefighters. Through his capping powers, the Secretary of State for the Environment fixes the size of every authority's budget. As a result, every one of the 38 million poll tax bills to arrive in March and April will bear the fingerprints of the Secretary of State.
That proposition becomes even more apparent when one considers the size of the bill. The Government have already abandoned their prediction—they said so again today—that the average bill would be £257. Even Ministers seem to concede that their record on the issue is so lamentable and lacking in credibility that it is preferable to admit error early. It now seems inevitable that the bills will be closer to £300 on average than the Government's previous over-optimistic figure.

Mr. Frank Haynes: It is even worse than that —[Interruption.] I have been present, and I shall not take a crack like that from a Conservative Member.
A coal mine contributes towards a local authority's affairs. The recent Rothschild report suggested that there would be hardly any pits left in Nottinghamshire. My constituency will probably lose many pits, which will mean that the local authority will lose a lot of money. Where will the money come from to provide the necessary services? It seems incredible that the Nottinghamshire Tory Members supported the Government's policy on pit closures.

Mr. Gould: My hon. Friend makes an interesting point. One of the most regrettable and astonishing aspects of the poll tax fiasco is that Tory Members have been so disloyal to the local authorities that have been lumbered with the problems of dealing with the tax and its associated effects. I cannot help but think that local communities will know what action to take when they get the chance to ascribe the blame.
The Government have no one but themselves to blame for poll tax bills that seem likely to lose them the general election. The study by the Chartered Institute of Public Finance and Accountancy published last week suggested that bills in England would include a non-collection surcharge of, on average, £21—sadly, even that figure seems likely to be an underestimate.
Those problems could have been avoided if the Government had abolished the poll tax immediately instead of taking the Walter Mitty view that the wish was as good as the deed. Presumably, when the Secretary of State announced last year that the poll tax would go, he never thought that he would be held to account for that promise before a general election. As it is, local authorities face all the difficulties of collecting what the Prime Minister has described as a "virtually uncollectable" tax. Not only will the Prime Minister's assurance in October that the Government had "abolished the poll tax" be ringing in people's ears, but there will be two additional Government-created handicaps.
First, the 20 per cent. contribution rule remains in force, even though the Government have conceded the principle that it can no longer be supported. That rule means that local councils have to continue to try to squeeze blood out of stones while trying to collect the poll tax from people with literally no income. Even the Audit Commission found that the tax cost £15 in administration for every £6 of net revenue it raised. The problem is much worse in inner-city districts, where the Audit Commission found that up to 60 per cent. of the entries on a poll tax register were likely to change in the course of one year.
The second handicap is even more bizarre. The Labour party and local government in general have warned for some months that there is a legal difficulty in persuading magistrates courts to accept computer records as evidence. The Government, who were responsible for the oversight in the first place, have been remarkably complacent in dealing with the problem. Even now that they have been persuaded that action is needed, they propose a change that will take six weeks to have any effect. That is simply not good enough. It is hard to fathom what the Secretary of State is playing at, and even harder when he writes to me saying that he was prepared to consider a short Bill, but abandoned the idea because the passage f the schools legislation was delayed. That almost beggars belief. Either there is a need for a short Bill or there is not.
The Secretary of State is responsible for the poll tax mess and for getting local authorities out of it. It is his duty to act to resolve the problem, not to make silly party points while local authorities are forced to mark time and poll tax defaulters get a six-week holiday.

Mr. Ian McCartney: The metropolitan borough of Wigan, represented by myself and my hon. Friends the Members for Wigan (Mr. Stott) and for Leigh (Mr. Cunliffe), contains three completely different situations. The magistrates in Leigh refuse to deal with the council's applications, Wigan magistrates courts implement them and in my constituency, Makerfield, the magistrates adjourn them. Local authorities have to attend court each day and, depending on which magistrates are in court, they may or may not be able to make an order. This is a shambles, which the Government know about and about which they do nothing.

Mr. Gould: I gladly adopt my hon. Friend's word: the position is a shambles. No local authority can be assured that it can successfully pursue poll tax defaulters in the courts. The Labour party's offer of co-operation on a short Bill still stands, and if the Government wish to plug the loophole they can do so in just one day. If the Government

still ignore that offer, local government and poll tax payers will know who is to blame for the bills that will have to increase still further as defaulters are again let off the hook by this lazy and incompetent Government.
True to form, local government will be left by the Government to clear up the mess. They have already had to issue 10·5 million summonses—the biggest debt collection exercise in the history of the world. Local government has at least £1·5 billion of poll tax still outstanding. The Government do nothing to help, but make matters worse by their intransigence and stupidity. The Government have given up on local government. They have given up any hope of remedying their terrible mistakes. They have given up the intention of doing anything but hang on by their fingertips until a general election puts them out of their misery. When that finally happens, the loudest cheers will come from poll tax payers and local government as a whole.

Mr. John Biffen: For just over an hour, the House has been entertained by highly contentious exchanges between occupants of the Government and Opposition Front Benches, but I confess that my contribution will be extremely limited and considerably less exciting. I have no doubt that the moment I resume my seat, normal hostilities will be resumed.
I refer to the point made by the hon. Member for Dagenham (Mr. Gould) concerning the standard spending assessment and the difficulties that that system is encountering. Even in these somewhat excitable circumstances, the House ought to reflect on that aspect fairly calmly. Whatever may be the outcome of the general election that confronts us, it is clear that the future pattern of local government will again be disturbed.
There is no prospect of continuity. Nothing is more depressingly certain than a continuation of the provisional. Therefore, the SSA will be with us for quite a while. I see no prospect of root-and-branch reform, which makes all the more necessary detailed consideration of the system's application and a preparedness to make adjustments where it is manifestly inequitable in its operation.
I have in mind in that respect the experience of the county of Shropshire in the recent past. Under the measure that we are debating this afternoon, Shropshire's SSA will increase by 5£9 per cent.—the fifth lowest figure for shire counties. In the previous year, Shropshire had the lowest increase. I do not believe that anyone making a reasonably detached judgment of local authority affairs in Shropshire would conclude that it is a profligate county council, but on the SSA arithmetic, it is faced with a number of stark options that naturally fall predominantly on the educational sector of the council's spending.
One of the options that it demonstrated was to use its SSA resources to meet statutory but not non-statutory educational obligations—which of course meant the loss of nursery education in the county. Naturally and understandably, that brought a sharp reaction. I do not believe that anyone involved in the campaign which that decision prompted considered that there was any party political dimension to it. I say that because, in recent


weeks, I have been associated with others of my hon. Friends representing Shropshire constituencies and with councillors across the political divide.
The county council resolved to use £4·6 million from its reserves to ensure that nursery education as currently conducted can be maintained for the year in prospect. In my view, that decision was wholly justifiable, although no one can relish the running down of balances on that scale. Above all, no one can have any faith in the certainty of nursery education in the county, knowing that there is no prospect of running down balances on that scale for another year.
I return to the question of how SSAs will be calculated in future and the way in which the methodology can be applied in respect of nursery education in a county that has to meet the needs of sparsely populated rural communities. I ask my right hon. Friend the Secretary of State and my hon. Friend the Minister for Local Government and Inner Cities to take account of the difficulties created by the current year's SSA settlement; to take note of the considerable gesture represented by the running down of the county's balances; to show proper sympathy with the problems that exist; and to ensure that, when next year's settlement is considered, the sword of Damocles will not be held over the future of nursery education in Shropshire. The county council's behaviour has been exemplary, and I do not believe that it is the canons of good government that such a threat should exist.

Mr. Lawrence Cunliffe: Over the past three years, we have attempted to put before Secretaries of State and Ministers the special financial plight confronting the metropolitan borough of Wigan. Recently, we had extended to us the courtesy of an all-party delegation being received in the very best spirit by the Minister for Local Government and Inner Cities and his staff. Its members placed before him the books, as it were, of the metropolitan borough of Wigan, of which my constituency is a part.
For three years, before any rate was fixed, or any capping criteria were set, we systematically placed before the Minister for his consideration and that of his staff a request to be advised how best Wigan could achieve maximum efficiency, value for money, good housekeeping, and everything else that speaks well of local government services.
That gesture was accepted by the Minister to the extent that he sent one of his civil servants to Wigan for several months to examine its books. Even the Minister himself concedes that authority's excellent quality of services and first-class housekeeping. However, when I put questions to the Minister, he says that that is not relevant to the standard spending assessment formula. What on earth are we supposed to do in such a case, which has been examined by the Audit Commission and by The Sunday Times, whose league table showed Wigan to be the third most efficient metropolitan district in the country? 
Referring to the district's value-for-money educational services, the Association of Metropolitan Authorities states in the parliamentary brief sent to all right hon. and hon. Members that the teachers' pay award will have implications:
Teacher jobs will have to be sacrificed to meet capping criteria. The Government claims that it wishes to improve

standards and hails the SAT 7-year-old test results as a move in this direction. Yet Wigan, which produced above-average results, is being forced to consider reducing its teaching staff.
Impartial assessments by two highly professional organisations clearly state that that metropolitan district is again being discriminated against under a system that militates against good housekeeping and accountability.
When the poll tax was first introduced, I understood that it was about ensuring greater accountability to ratepayers, Parliament, and Ministers. The bit about accountability to Ministers may well be true. It appears to be their exclusive preserve, regardless of the case that authorities may present, to ordain that an unfair, unworkable and discriminatory formula must remain the norm.
Since the introduction of standard spending assessments, my borough has been capped three times. In the past three years, £38 million has been taken from its budget. An all-party delegation, including the leaders of the Conservative and Liberal groups and the chairman of the chamber of commerce, presented the case to the Minister for Local Government and Inner Cities recently, but no financial relief has yet been received. We now face a further deficit of £15 million to meet the capping criteria. It is estimated—again, the position has been examined by a Minister—that between 750 and 1,000 redundancies will follow.

Mr. Nigel Spearing: In local government?

Mr. Cunliffe: Yes, in local government.
Only last week, 625 miners lost their jobs at the Bickershaw colliery, and the week before, 220 people were made redundant at a textile mill. The borough is already involved in a grim economic scenario, and needs all the help and encouragement that it can get.
What will the proposed cuts mean? A minimum of about 400 teachers will lose their jobs somewhere along the line; social services will be decimated; 25 or 30 youth officers will suffer. The aged, the sick, the chronically disabled, the young and the unemployed will all be affected by this stupid SSA.
My Tory opponent in Leigh has said that he will fight the next election on home rule and the breaking up of Wigan metro—a unitary authority, which has built in the new local government criteria. I am sorry that the Secretary of State is not present. According to an item in the Leigh Reporter, Mr. Egerton—the Conservative candidate—has spoken to the Secretary of State, and has approached various other people. He says that he has special access to the right hon. Gentleman's advisers, and that the intention is to restore Leigh's status as a non-county borough and to make Atherton, Tyldesley and Hindley into urban district councils.
Perhaps the Minister will confirm or deny that that is the plan. It entirely contradicts the criteria laid down for local government, including the elimination of two-tier authorities. It is, of course, understandable that a Conservative candidate will need a little help when the Labour majority is 17,000.
The Government claim that the SSAs are scientifically calculated, and represent a real measure of the need to spend. The Minister is still the patron saint of the original poll tax—as opposed to the new Whitehall council tax—and I saw him on television the other day making such claims.
Is it not true that all the professional associations in local government—bodies that did not involve themselves in the political debate until this corny formula came into effect—have condemned the system? It has militated against the lives of local people—against their trades, their associations, their business acumen and, above all, their employment prospects. It has been proved to be unfair, unworkable, discriminatory and indefensible; it has been utterly discredited.
If this is an example of the new Tory "charterism", heaven help the nation. The sooner the Government have the guts to grant the country sweet relief, the sooner we can provide hope and consolation. Under a Labour Government, the SSA formula will be destined for the dustbin, along with its architects, the Tory legislators.

Mr. Robert G. Hughes: I was intrigued by the fact that the hon. Member for Leigh (Mr. Cunliffe) devoted so much time to the utterances of his Conservative opponent. I should have thought that, with a majority of 17,000, he would not be all that worried, but perhaps his anxiety is an indication of the impact that the Tory candidate is making. I am less worried, as Labour would have to gain 22,000-odd extra votes in my constituency. One never knows, however; the electorate might change their minds.
Let me say a word about the tone of today's debate.

Mr. David Blunkett: One word: rubbish.

Mr. Hughes: As the hon. Gentleman has not yet spoken, it is not entirely rubbish.
It has been the case during my time in local government and since then—and I suspect that it has always been the case—that every local authority grant settlement has been greeted with the chorus, "It is not enough." It is inconceivable that after the Secretary of State had announced the amount that would be available, an authority would ever say, "Thank you very much; that is exactly what we were looking for." That certainly did not happen under the last Labour Government.

Mr. Allen McKay: The hon. Gentleman is not comparing like with like. In the days of the rates, before the poll tax regime was introduced, local authorities would complain to the Secretary of State that they had not enough money, irrespective of which party was in government. Then, however, they were allowed to collect the extra money that they needed after going to the people to ask them for it.

Mr. Hughes: I was living in the London borough of Ealing when it put up its rates by 57 per cent. The borough was allowed to collect the money all right, and I remember who it collected it from.
I was a member of Hounslow borough council, which was then Labour-controlled, under a Labour Government. The borough complained then that it did not have enough grant. The complaints of Opposition Members should be put into context. We should bear it in mind that many local government leaders—members of different parties and different local authority associations

—will be saying, partly as a way of bargaining and protecting their position, that they would like more money.
Of course my own borough, the London borough of Harrow, could use more money. School rolls are rising and our first schools are crammed. There are no empty places in them, as there are in other local authority areas. My local authority is financing one first and middle school, and seeking to finance a second.
I know that eventually the money comes back, but it has to be financed in the short term. There is also the problem of the rapid increase in the Metropolitan police precept. Of course we want more money to be spent on policing, but that money has to be added to the community charge bills of people in my constituency and elsewhere. In Harrow, people would like more money, but they recognise that they cannot just have more money without paying the price for it.
The standard spending assessments have increased by 6·8 per cent.—that is above the level of inflation. It is important to recognise that it should be possible for each local authority to be able to spend at least what it spent last year, plus inflation, without making any cuts in services. Surely, the art of government, as the noble Lord Wilson said when he was Prime Minister, is summed up in the phrase:
Politics is the art of the possible,

Sir Anthony Grant: It was the late Lord Butler who used that phrase.

Mr. Hughes: I am grateful to my hon. Friend, who used to represent part of my constituency. I thought that it was a wise phrase to have been used by the noble Lord Wilson.
Anyone in government, whether local or national, must choose priorities. If money is spent in one area, it robs money from another. Money given to local authorities used to be given in watertight compartments and if it was not spent in one area, it could not be transferred straight across to another. That has changed under this Government. There is greater flexibility for virement under the budget headings. [Interruption.] The hon. Member for Wansbeck (Mr. Thompson) may not have had experience in local government. I am talking with direct experience of local government during the previous Labour Government.

Mr. Jack Thompson: Is the hon. Gentleman aware that for three years I was leader of my county council and that my service on local authorities extends over 15 years? I was the chairman of the policy resources committee of my council and money was switched around and is switched around by every local authority.

Mr. Hughes: Yes, but there were limitations. If the hon. Gentleman cares to go to the Library, he will see that that is confirmed.
Since money can be transferred between budget heads, if money is wasted in one area, it is because the local authority has made a choice not to spend it elsewhere. When Labour-controlled Birmingham council—[Interruption.] The hon. Member for Sheffield, Brightside (Mr. Blunkett) said, "Here we go." When I have finished this catalogue of examples, will the hon. Gentleman defend it?

Mr. Blunkett: Is this to be the same catalogue that the hon. Member for Birmingham, Edgbaston (Dame J. Knight) put on the Order Paper yesterday? If it is, all who can read can be spared the hon. Gentleman's comments now.

Mr. Hughes: I am delighted to say that this is a different catalogue. I am grateful to the hon. Gentleman for pointing out that there are more things on the Order Paper that one can look at, including buying wedding rings for two stone statues at a cost of £50,000. I was not going to mention that.
I want to talk about the 149 trips to foreign countries paid for by Birmingham council. There were 29 trips to France, as well as trips to Puerto Rico, the Gambia, Hong Kong, Japan, Australia, the United States of America, Pakistan, Nepal, Bangladesh, the Soviet Union and Italy. The trip to Italy took place during the world cup and was supposedly a fact-finding trip to look at football grounds. Birmingham council decided to spend its money in that way and not on sweeping the streets, social services or education. That was the Labour-controlled authority's choice.
Derbyshire spent £1 million on its information department. That is another example of the Labour party making a choice in government. It felt that it would rather spend £1 million on information than on social services or education. Haringey was told that its £3·8 million vehicle bill could be reduced by £1 million if it was properly managed. It has not bothered to try to do so. That money is wasted when it could have been spent on social services or education.
Lambeth has many problems, but last year it spent £42,000 on a stretched limousine for its mayor. Perhaps some local authorities can afford that. I agree with the hon. Member for Vauxhall (Ms. Hoey) who was incredulous that money should be spent in that way.

Mr. Haynes: Will the hon. Gentleman now criticise the Government for wasting £10 billion on the introduction of the poll tax? How about that one? Have a go at that.

Mr. Hughes: The hon. Gentleman has many admirable qualities, but being able to add up is not one of them. That figure is conjured out of mid-air. It includes money that has been used directly to help reduce the size of people's bills. If the hon. Gentleman believes that that is money badly spent, he should say so. That money is also included in the fraudulent figures given by the Labour party for its council tax. The hon. Gentleman cannot have it both ways.
There are many problems in the London borough of Haringey. It could have chosen to spend money on social services or education, but it has chosen to spend £500,000 a year on luxury cars for 98 council officials.
I have a flat in Lambeth, as does the Labour party Whip. He and I both know how rotten the services are. Because it provides such rotten services, it is important to be able to telephone the council. One may need something done to one's flat or house. Therefore, it would have been a good use of money for Lambeth to pay its telephone bill to prevent the council being cut off 30 times in one year. That is a waste of money, and its typical of the choices made by Labour councils. It is no wonder that, for three years running, two Labour-controlled councils in London failed to close their accounts by the statutory deadline. If

I were running a council like that, I would be embarrassed to close the accounts and let people see what had been done.

Mr. Andrew Mitchell: My hon. Friend has been talking about Lambeth. Does he agree with the Local Government Chronicle which, when commenting on the district auditor's report, summed up Lambeth as
an unresponsive organisation where action is generally achieved only after inordinate delays or in response to a crisis"?
Does that sum up Labour government in Lambeth?

Mr. Hughes: I have some good news about Lambeth. I was told by a senior council official that things were improving and that there were fewer than 10 nutcases left in the Labour group. Things might get better.

Mr. Allen McKay: Say that to those outside.

Mr. Hughes: The official said it outside.
The Labour party has continued with its policy over the past few weeks. Just over a week ago, the Labour party claimed that massive cuts could be made in the defence budget without any redundancies. I thought that that was clever. Also, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) claimed that as Home Secretary he would put many more police on the beat without adding a penny to the Home Office budget. I thought that that was also clever—I do not know whether he does not intend to pay them, but he will have to take that up with the Police Federation.
What have we heard today from the hon. Member for Dagenham (Mr. Gould)? It is implicit in what he has been saying to his friends that whatever grant system applied—whether it was the standard spending assessment or something else—and were Labour to form a Government, every council would be top of the league. They would all have the same grant as those which currently receive the most. One could not read anything else into his words. However, we know that that is not only impossible but flies in the face of Labour's pretty tawdry record in government.
A Labour Government's agenda for local government has been made clear, at least to me. It is a bit like a Labour acid house party—what matters about an acid house party is not what goes on inside but the fact that one does not tell anyone where it is happening. All the Labour party's policies are conducted in whispers: that has now been revealed in Sheffield, where the Labour authority has plainly done a deal with the Labour Front Bench. The deal was to ask whether, if the authority set a budget that could not be met and if there was a Labour Government—Labour say, when there is a Labour Government—that Government would meet its deficit. In private, those on the Labour Front Bench have plainly said yes, and they have not said yes only in Sheffield.
I have spoken to Conservative council leaders across the country and received some interesting responses. Labour spokesmen are travelling around the country speaking to Labour councillors or Labour groups and echoing the words of Labour's deputy leader who told, I think, Motherwell's Labour council group, "You won't get as much money as you want, but you will get more." In other words, Labour is promising that the election of a Labour Government would be accompanied by more money.
Labour refuses to specify how much money or how it would be raised, but we know that it can be raised from only two people, or from one group of people in two different ways. It can be raised by increasing direct taxation, which Labour pretends that it would not do, or by allowing the local government tax bill—the council tax, or its version, which it laughably calls "fair rates"—to soar. That is the reality of Labour party policy.

Mr. Blunkett: The hon. Gentleman speaks as the chairman or vice-chairman—

Mr. Hughes: Vice-chairman.

Mr. Blunkett: —as the vice-chairman of the Conservative party's local government committee. In that prestigious role which the Conservative party grants to such a post, he has already made a statement in a press release last week about members of Labour's Front Bench travelling up and down the country making promises. Will he give us examples—other than the one he has dreamed up about Motherwell and the fictitious and erroneous statement about Sheffield—of the figures, statements and promises, and how much?

Mr. Hughes: The hon. Gentleman has given me some good news—I did not think that anyone had picked up my press release. I am delighted that he has read it. It has a better circulation than I thought and that will encourage me to publish more. I am enormously grateful to him. He must be patient, because I shall reveal all—he need not worry about that. There are examples from Kent, the west country and the north and they will all be revealed.
The hon. Gentleman should seek advice about the quotation from the deputy leader of the Labour party. Some Labour advisers might be lurking in the precincts of the Chamber to advise him precisely what the right hon. Member for Sparkbrook said, but I have cited his exact words—they were spoken in public. If that is what the right hon. Gentleman says in public, God alone knows what he says in private in a smoke-filled room, because it is in the privacy of that smoke-filled room that other words are being used. Unfortunately, Labour council members are revealing all to their Conservative counterparts, and we are receiving the information.
The Labour party, with the tawdry and lacklustre performance of the members of its Front Bench, refuses to face one simple truth. It is fine to say that it will spend more money and that it wants to improve services, but we and the people of this country know that promises have a price and that, unless one can pay the price, the promises are completely empty.

Several Hon. Members: rose—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind the House of Mr. Speaker's appeal for brief speeches.

Mr. David Bellotti: I am glad to have heard all but three minutes of the speeches made so far. I begin by dealing with the overall finance available to local government and the Government's decision to make provision of £41·8 billion for the total standard spending assessment for 1992–93. If we consider that figure and the

different services that different local authorities need to deliver, we can conclude only that that figure is inadequate for the job.
The Secretary of State spoke about a 7·6 per cent. increase, but that misleads many people outside the House, because it implies that that is an increase on the services that they enjoyed last year. That is not so. There will be only a 4·8 per cent. increase in the level of services that they had the pleasure to enjoy in 1991–92. We need to establish the facts and not listen to the figures, which I believe are sometimes deliberately intended to mislead so that any blame for subsequent action and mismanagement of services will be attached to local authorities, not to the Government. Let us nail that issue at the outset.
I think that the House has now concluded that 4·8 per cent. is the real sum of money about which the Secretary of State spoke. We need to bring into play the amount of new service provision which local authorities have agreed to provide after Government legislation. I refer briefly to three pieces of legislation—the Education Reform Act 1988, the Children Act 1989 and the Police and Criminal Evidence Act 1984. If three are not enough, I could mention care in the community policies.
The provisions of those Acts add to the costs of local authorities, which are expected to bear the additional service demands against a background of a 4·8 per cent. increase. That figure is wholly inadequate for the job, as was demonstrated by the number of local authorities whose representatives have met the Minister at the Department during the past few months. They were of all political persuasions, and they brought home to him the inadequacy of the sums available. It would be interesting to hear from the Minister how many local authorities have written to express their concern about the inadequacy of the financial settlement or have been to see him. That in itself would be quite revealing.
A further problem is that, during the coming year, local authorities will have to pick up other costs which have not been allowed for. There is a 1·3 per cent. tail-end teachers' pay award from 1991, which will come into effect in 1992–93. That does not appear to have been taken into account in the settlement figures. In addition to that 1·3 per cent. carry-over, the Government will fairly soon settle teachers' pay for next year. The allowances for inflation in the figures given for local authorities will be very much below the level of the pay settlement for teachers which local authorities no longer have a say in fixing.
Therefore, local authorities are being asked not merely to begin with a level below the rate of inflation or to deliver extra services, but to deal with decisions taken later which they will find it difficult to meet. They will have to meet them even if they find it impossible: it will be the law, because the Government have centralised the decision-making processes for teachers' pay. Therefore, all local authorities of every political persuasion will conclude that the settlement is wholly and utterly inadequate for the job.
The majority of local authorities will stay within their capping limits. By and large, local authorities want to observe the regulations and do not wish to go outside the law. In a sense that makes it worse, because they pass on to the people in the local community the result of the Tory cuts—and cuts they are.
The position is made worse by central Government trying to interfere in some of the service delivery. Is the Minister aware of a letter sent from the Home Office by Her Majesty's inspectorate of constabulary to all chief


constables, requesting details of budgets from 1992–93? The letter's effect is that each local authority that funds a police authority should spend up to its SSA on services for the police. Many hon. Members may agree with the figure, but the impact for many local authorities will be that they will have to make cuts in education, in social services, in housing and in other services if they spend that amount on services for the police.
West Midlands was mentioned earlier as a county council that is also a police authority which did not intend to spend up to its SSA on the police. The only alternative would be the wholesale closure of a number of schools. I stress that it would be the closure of schools, not merely the cutting of hundreds of teachers' jobs.
I know that Ministers often do not listen when I speak about local government. All I can do is to cut out Hansard tomorrow, send them the statistical information and invite them to dispute the figures. I like to present the figures so that at least I give Ministers the chance to have an intellectual argument. They never enter intellectual arguments with me and I can only assume, as did other hon. Members earlier, that they do not like to listen to people who have actually been in local government for a number of years, because they are afraid that they might learn something.
There is an additional problem which the settlement does not take into account, which is money that local authorities cannot collect through the poll tax. It is not money that they do not want to collect, but money that is uncollectable. Southwark, part of which is covered by the constituency of my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes), has applied for 2,500 liability orders. It is a matter of regret that the Minister and the Secretary of State were not able to support the Opposition proposal in that regard, which could have been put quickly on to the statute book.
As a result of the position in the courts and because the Government could not get their legislation right to begin with, Southwark could lose up to £500,000 of revenue in the short term. No local authority can afford to lose such money. It is not that Southwark does not intend to collect the money; it is doing its best.
The Conservative chairman of the Association of District Councils has said that the response by the Secretary of State to the matter is not enough:
We need immediate action to change the law and it must be retrospective.
Co-operation on the matter has been offered by the Opposition, but it has been turned down.
The Minister courteously received a delegation from Eastbourne, my local authority. We outlined the cuts in services that would be necessary in the Eastbourne borough council area. We face a poll tax of about £315, and we told the Minister that a month ago. The response of the Minister and the Secretary of State in the press was that the figures would not be reached, but they will. One reason is that the county council will now spend up to its SSA, which it has never done before. It will put £1·43 million into its budget to increase provision for special educational needs. It must do that; if it does not, it will be taken to court by many parents for failing to provide the special education which families need in East Sussex.
It is all very well to receive a courteous response when one goes to the Department of the Environment. In the group from Eastbourne, we had the Liberal Democrat leader of the council, the Conservative leader of the

opposition group, the chairman of the chamber of commerce, the president of the Eastbourne Industrial Association and the chief executive. All gave the same message and the Minister gave the same answer: "I will have to look at it. If I give you anything, I will have to take something from somewhere else." Surely the Minister should conclude that there is not enough money in the pot and that the pot is not big enough. Not only Eastbourne, but other areas should have more consideration.
My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) tells me about Northumberland county council. He draws attention
to the crisis in education in Northumberland where the inadequate SSA has led to cuts of £6·5 million including £3·7 million from the education service. Severe cuts are being imposed on schools which were already providing education at much lower costs per pupil than the rest of the country. Last week, the head teachers of every Northumberland … school came to the House of Commons to protest about the effect of the cuts and about the system that has produced them.
Those head teachers were not from one political party, but from the schools, and spoke on behalf of the children in those schools. How can an SSA system and settlement work like that in Northumberland? That county council does not appear on the Government's list of profligate authorities.
Sutton is also controlled by the Liberal Democrats. The Government are imposing limits on Sutton which will lead to an £8 million cut in next year's budget. Sutton has the fourth lowest net expenditure per head of all the London boroughs. It spends less per head than almost all the London boroughs, yet it will have to cut £8 million from its budget next year. In 1991–92, it is spending £561 per head. Kingston upon Thames spends £629, which is much nearer the average. If Sutton spent at the level of Kingston, it could spend another £11 million without being affected by legislation. The cuts in Sutton and the blame for them lie clearly at the door of the Tory Government.
The revenue support grant per adult in Sutton is £485. In Wandsworth, the figure is £977. It is no wonder that Wandsworth can have a nil poll tax for 1991–92 when it gets so much extra per adult compared with most other London boroughs. That is why people keep referring to Wandsworth. However, Conservative Members do not often refer to the services that Wandsworth delivers, although Wandsworth was mentioned in an earlier exchange.
If Conservative Members did refer to the services, they might draw attention to the fact that Wandsworth borough council was taken to court and ordered to pay £12,000 in legal costs after the court heard of an infestation of cockroaches in the York Road estate and in the St. James Grove estate had made tenants' lives a misery because the cockroaches crawled into food, drinks, beds and shoes. If that is the level of services provided in Wandsworth, it is no wonder that the council tax is nil. We should not talk only about the spending, but about the level of services. Every time a Conservative Member starts to shout about Wandsworth, the Opposition will start to shout about cockroaches.
The Isle of Wight has also been mentioned. The Government have successively reduced support to the Liberal Democrat-run county council, which has always provided cost-effective services.

Mr. Andrew Mitchell: I wish that the hon. Gentleman had spent a little longer looking at the example of


Wandsworth, whose services he decried. Is he not aware that there is an excellent comparison between Wandsworth and Lambeth? The comparison has been made by many independent bodies, including the Audit Commission. Does that not show that people in Wandsworth get a better service across the board, respect their council more, feel that they get a better service and pay a great deal less for it?

Mr. Bellotti: I did not want to return to the subject of Wandsworth. I will compare Wandsworth to all other local authorities. I am not prepared to join in a Government attack on a small number of local authorities when we have the interests of all local authorities at heart. However, the hon. Member for Gedling (Mr. Mitchell) has given me the opportunity to say that, when one of the tenants approached the council about the cockroaches in her flat, the local authority bribed her to drop her complaint and offered her another flat. The council should have investigated the complaint rather than moving the person, because the problem was then present for the next tenant.
I was talking about the Isle of Wight. The county council there has always delivered services cost-effectively. The SSA which the Government are imposing on the local authority makes it more difficult for the services to be delivered. The choice is stark, not only for the Isle of Wight but for other local authorities: should one exceed one's SSA and inflict a high poll tax—soon to be the council tax—on members of the community, or should one see whether services can be cut?

Mr. Barry Field: I think that the hon. Gentleman heard my intervention in the speech of the Secretary of State. When the Liberal Democrats last fought the county elections, they ran the balances down to £250,000. Balances now stand at nearly £3 million, because the Isle of Wight had the highest shire county settlement of any English county last year. This year, per capita, we have moved up from 14th place to 1lth.
I know that the hon. Gentleman has heard me make the point many times before, but in 1962, the Edwards committee considered that, in terms of local government finance, the Isle of Wight was underfunded. Successive Members of Parliament have led delegations to the Department of the Environment to argue the case for an increase in rate support grant or standard spending assessment. None of us disagrees that there is a problem, but it is not something that has suddenly visited us from outer space this year. The cuts that the Liberal Democrats are imposing on the Isle of Wight in this election year are purely political and not dictated by economic or financial necessity.

Mr. Bellotti: The hon. Gentleman is entitled to his opinion, but the facts stand. If the Government had not taken increased central control, the Isle of Wight local authority—like all other local authorities—would be in a better position to take its own decisions.
The hon. Gentleman is inconsistent. It seems that today he intends to support the Government and accept the SSA figures, yet he proposes to join a march on Saturday against the cuts—which are really Tory cuts imposed by the Government on Newport and the Isle of Wight. Those actions are wholly inconsistent, and I am sure that people

living on the Isle of Wight will realise it. One day the hon. Gentleman votes to support his local authority's SSA, and a few days later he marches against cuts that are the result of Tory action. The hon. Gentleman deserves any conclusion that those on the Isle of Wight may draw. [Interruption.] I can only hear the word "balances".

Mr. Barry Field: Three million pounds-worth of balances.

Mr. Bellotti: Those with experience of local authorities know that, in successive years, balances vary—up and down—but the services provided are the key factor in deciding whether the local authority is doing the job that it should.
Before I conclude my remarks—I must say that I am rather enjoying the debate—I want to refer to voluntary organisations. In debating local authorities, we often overlook the role that the voluntary sector plays in our community. The more centralised capping powers and increased restrictions on SSAs the Government put in place, the more the voluntary sector feels the pinch, because the voluntary organisations cannot enter into partnership programmes.
The National Council for Voluntary Organisations ably drew that to our attention in its response to "Competing for Quality". The Government's compulsory competitive tendering proposals do nothing to help their situation—in fact, they make it worse. The voluntary organisations are being squeezed out of the partnership programmes that they have provided as a result of the Government's action on compulsory competitive tendering and as a result of the SSAs before us today.
If we really want the voluntary sector to enter into the provision of programmes in our local communities, we must do far more to encourage them. All that happens at present is that local authorities shift their money to items such as special needs—which I mentioned in connection with East Sussex, and which is very important—away from, for example, the provision of play facilities, because the provision of such facilities is not a statutory responsibility. The voluntary sector, which could provide very cost-effective play facilities if it had a grant, no longer receives a grant and cannot provide them.
The Government have not only attacked local authorities; they have attacked councillors of all parties. The latest information we have is that many councillors of all parties are leaving local authorities because they blame the Government for interfering in the provision of services that they were elected by local communities to deliver.
The Government are having such an adverse effect that 42 per cent. of all councillors are standing down after only one term of office. That is an amazing statistic. [HON. MEMBERS: "What about you?"] I can tell the Minister that, in every election that I have fought since 1977, my vote has increased, and that I have no intention of losing that record. When I stand down from my local authority membership, I shall do so with reluctance, because I believe that many of our councillors do a much better job than many of us in the House. Their role is very important and should never be underestimated.
The forced service cuts, the Government's attacks on local councillors and the fact that the Government have given local authorities an uncollectable tax base all lead us to the conclusion that the Government do not value local authorities' work. What we must do is to put into place


something that will give local authorities the confidence to deliver services. The Government cannot give them that confidence. We must look elsewhere. We must have people who will serve their local communities.
The people in those local communities know who to blame for the poll tax: they know who introduced it and who is responsible for it. They know who to blame for the cuts in local services; they are in no doubt whatever about that. Those self-same people cannot wait for the opportunity to put the blame on the Government. The earlier we have an election and give them that opportunity, the better.

Mr. Lewis Stevens: Opposition Members have implied—indeed, have stated directly—that the SSAs will work to the advantage of Tory councils. I wish someone would explain to me—coming from Warwickshire as I do and knowing the problems that we have had there in the past 12 months, which appear likely to be repeated to some extent—how that can be the case.
Questions have also been raised about the quality of the SSA system. There has been too much writing off of the formula as a Tory ploy dreamed up by the Government—not worth while and not logical. That view needs to be countered. The SSA system is an objective system applying in a fair and proper way to every authority in the country.
It is quite ludicrous to think that one might choose another system for the distribution of central Government resources which would not of necessity involve some formula that would almost certainly appear to benefit one local authority against another. But perhaps the Labour party prefers total patronage, so that it can dish out the money to councils that it thinks should have it and withhold money from councils that it thinks should not.
That would be a much more unfair system. We need a system, such as the SSA system, which can be worked on a formula and which takes into account many of the factors that statistics show have a direct correlation to what one might spend on various services. It is a sensible and logical system.
Having said that, however, I emphasise that any system that serves local government must be fine-tuned and tinkered with continually, because we do not live in a static world—in local government finance or anything else. To cope with changes—whether demographic changes or changes in what the Government require of local government—we need to update and change the arrangements.
Under the present system, Warwickshire almost inevitably seems to come off not very well, to say the least, and distinctly badly in some areas, to put it at its worst. The Audit Commission puts groups into families. The families that it has chosen for us in terms of SSAs and grants invariably put us very near the bottom. No one would suggest that Warwickshire, given the type of county that it is, would normally expect to receive very high levels of grant. By most criteria, it could not be said that the county shares the problems of the inner cities; nor does it have the problem of sparsity of population that is faced by counties such as Northumberland. Nevertheless, we believe that we should have more money than the amount that is distributed to us.
Indeed, distribution is the key. The Government have substantially increased the amount that is available to

local government overall, but there has been great difficulty in satisfying each local authority that it has received a fair amount in the distribution. In his usual eloquent manner, my right hon. Friend the Member for Shropshire, North (Mr. Biffen) explained the problems facing north Shropshire in terms of the distribution. Those problems are common to some of us in the midlands.
Last year, we in Warwickshire had to take a look at all our services, and because education was the big spender, it got the biggest look and was put right at the top of the list. The county council eventually said that it could protect nursery education, but that it would have to make savings elsewhere. This year, it has decided that it will protect the schools' budgets and police spending, but inevitably that means that other services come under pressure. The local authority must consider how its provision of those services can be changed, which may mean staff reductions. Great pressure is placed on local government.
I appreciate that this year, like last year, some changes have been made to the SSAs, and that some are slightly to the advantage of the county of Warwickshire. However, although any swingeing changes may benefit some, they will be to the detriment of others and, by its very nature, local government is totally incompetent to deal with big and quick changes. Warwickshire found the change from grant-related expenditure to the revenue support grant system a big change which was difficult to cope with. That is the nature of local government—

Mr. James Pawsey: My hon. Friend has an entirely deserved reputation in Warwickshire as an assiduous Member for Parliament. I readily acknowledge that he defends his constituents through thick and thin. Will he join me in asking our hon. Friend the Minister of State whether, if Warwickshire should produce a budget that is reasonably above the level of the SSA, he will give helpful consideration to lifting the cap, as he did last year? Such action would be much appreciated by all Warwickshire Members.

Mr. Stevens: I appreciate what my hon. Friend says, and hope that our hon. Friend the Minister of State will listen sympathetically. I am sure that, when we know Warwickshire's budgets, the Minister of State will be willing to meet delegations to explain the position in Warwickshire with the same courtesy as previously.
The effect of the SSA being, as we think, rather low, is that that directly puts pressure not only on services but on the level of the community charge. Depending on how the SSA works, that in turn can affect the district councils as well as the county council.
The Opposition have sought to give the impression that they would do away with the local authority expenditure limits that the Government have suggested. They have implied that a Labour Government would provide as much extra money as the local authorities say they need. The Opposition approach is: "Don't worry, we'll provide a system of local government finance that will work without restrictions. We do not want to restrict local government, but to give it a free hand." 
There is no way in which any responsible financial approach is compatible with taking the lid off local government. Many years ago, a senior Labour politician told local government, "The party's over." The Opposition will not be able to bring back that sort of party again.
In answer to the point that counties such as Warwickshire are being unfairly treated under the SSA system, the Labour party says, "Don't worry, we'll find a way round it. There will be no problem." However, we know from the Labour party's past practices—this is the implication of what the hon. Member for Dagenham (Mr. Gould) said—that the Labour party may well shift the distribution, but that it will almost certainly do so in favour of the urban areas, not the shires, which we believe are the areas that get the weakest deal at the moment.
I hope that, when my right hon. and hon. Friends talk to the local authority associations in the near future, by which time they will be able to take into account data from the 1991 census, they will look carefully at the formula for the SSA. Some of us in the north and the midlands believe that the area cost adjustment gives too much to certain areas but not enough to others. I thank my hon. Friend the Minister of State and his officials and Warwickshire council officers for taking the time to go through SSA calculations in some detail. Nevertheless, we feel that some factors are over-compensated for and that that problem needs to be addressed.
We should like the SSA to be refined but, to do that, further studies may need to be carried out. The decision on reallocation should not be taken off the cuff. We may need to refine the area cost adjustment—and not only for the south-east. Perhaps we should introduce a graduated area adjustment, but it may not be possible to do that with any accuracy at the moment on the information that is available. However, I am sure that my hon. Friend will consider setting up studies that may lead us to a better, more refined SSA system in the years to come because it—or something very similar—will form the basis of all future distributions of finance to local government.
Local government is in a difficult position, but some of its problems are self-made. My county authority is not profligate, but we believe that the SSA should be adjusted in the next and subsequent years and that it should be refined in an attempt to make it more equitable. I know that my hon. Friend is aware that some changes have only small effects on some authorities but large ones on others. I hope that, in the months ahead, he will look carefully at the ways in which we can adjust the SSA—perhaps to make minor changes, as has happened recently, but perhaps also with a view to making more extensive changes to try to find something that appears more obviously fair to all the local authorities in England.
Finally, the Government's proposals take a realistic view of the total amount that should be given to support local government in the coming financial year, and lay down a good guideline on the amount that local government should be aiming to spend overall. Local government's job must be to provide a base to allow the area to take advantage of its services and to build the community it wants. Local government's job is not to establish the grandiose schemes that we have seen in some authorities, which some people think are good and should be established irrespective of whether the Government think that local government should do that job.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. I remind hon. Members, that, between 6 pm and 8 pm, speeches will be limited by the 10-minute rule.

Mr. Nigel Spearing: I gather from the speech of the hon. Member for Nuneaton (Mr. Stevens) that Warwickshire is in trouble, and from the earlier speech of the right hon. Member for Shropshire, North (Mr. Biffen) that Shropshire is also in trouble. Those councils are drawing on their balances to maintain nursery education. Presumably those councils operate in counties where the Minister's friends abound. I ask the hon. Member for Nuneaton and the right hon. Member for Shropshire, North to contemplate what the effect of reducing nursery education would be in east London—in Silvertown, Custom House, Upton Park and such places, where employment is more difficult to find.
One principle in the arithmetic is politically neutral, and depends upon equity and justice. I hope that such high-sounding words prove attractive to the Government. We have heard a lot about SSAs not covering costs, but one SSA is particularly important and has not been named hitherto. It is that on the estimate of capital repayment and interest arising thereon. One should remember that that represents a heavy burden and that roughly 80 per cent. of local authority income comes from Government. That is lower than it should be, and the effects are considerable.
The borough of Newham spends about £28 million a year on paying interest on capital borrowing. I am told by the borough treasurer that, last year, Newham had just over £20 million in its SSA to cover that. This year, we have experienced a shortfall, and the borough has only £18 million in SSA for capital costs. Therefore it has to make up £10 million from other services to cover what is surely an assessable need. The borrowing of £28 million was not sudden or profligate. It was something that any Government, particularly the one that we have had for the past 10 years, would say was necessary. It was approved and known borrowing, with a known repayment. Therefore, the £10 million that the borough is down must be obtained by cutting other services—taking from other SSAs—which is a very difficult job indeed.
I should like the Minister to tell us the basis of the calculations for SSAs and for capital interest. I cannot conceive of any equitable formula that would come up with such a deficit and with such an unjust burden on those services that have to carry it. We have already heard from hon. Members on both sides of the House about the unjust imposition on services. I want the Minister to comment on that, because that expenditure is, by definition, necessary.
Another and perhaps more complex point is equally bizarre and requires some explanation. All over the country, commercial and industrial premises are applying, quite properly, for rate reviews and reductions. Valuation courts have come up with the figures, but we do not know the total yet. In a written answer to me, which appeared on 24 January at column 387, the Government said that they too did not know all the figures.
The borough of Newham put some money aside against such losses, but suddenly, this year, it had to pay for borrowing £6 million to repay rates that were overpaid. That was due not to the rating valuation done by the council but to the valuation of the Government's own agency. If there was an error, it was that of the Inland


Revenue's estimate of rateable values. It had nothing to do with the council. The council has been told by the Government that that money has to be paid back to those firms that have paid too much in rates, despite the fact that the £10 million non-domestic rate pool cannot be touched as a result of legislation passed by the Government.
In my constituency, the council has made two large repayments; one to Tate and Lyle—the big sugar firm—of about £2 million and one to the Post Office, which has a large sorting office in my constituency, of about £1 million. Another £5·8 million must be paid on top of that to other organisations in the borough. That must be paid back in addition to the £10 million I mentioned earlier. All the increases in grant which the Government claim, despite the problems of inflation, will be more than absorbed by those repayments.
The unhappy borough councillors of Newham have been placed in an awful dilemma. That experience is shared by other councillors of all parties in different parts of the country. My councillors have asked whether Newham can capitalise on the money owed in respect of services. That deficit has built up over many years and they want to know whether Newham can take it forward. No, say the Government, it cannot, but they say that it may be possible to capitalise £3 million for two years. It is all up in the air, and I hope that the Minister can give us the proper answer tonight. The Government have said that, if Newham could capitalise, they would not allow it to spend the interest necessary to sustain that capital. I am shocked at that.
In Silvertown, a mother who worked at Tate and Lyle might ask me whether the £2 million that Tate and Lyle had received—big money—could not be spent on school books at Drew road school. We have had to cut the provision of school books. It is also rumoured—believe it to be true—that teachers will be without nursery classes. We have heard that Shropshire has already had to make such a decision.
That mother may ask whether it will be possible to send teachers on courses for the new national curriculum which the Government have imposed upon them. She will want to know whether the quality of her children's life will be reduced because the borough are paying her employers, the Post Office and X and Y company money that the borough should not have received five years ago. That is the position into which the Government have put us. They will not even allow the council to borrow the money to pay those organisations. That seems extraordinary.
All of us receive in the post advertising asking us to borrow. That is part of the Government's philosophy of the free market. However, the Government will not allow Newham borough council to borrow money to ensure that children and teachers get the services which the Government say, by statute, that they want them to have. That is the position. I do not understand why the Government will not allow the council to borrow. I am reminded of the scriptural story of the unjust steward, who was let off his debt by the king but who would not let off his own debtor.
The mechanism hits teachers and children and the future of any community—not just Newham but everywhere else. I have only one answer to that—the Government are ignorant of the effect of their own machine. They are ignorant of what the rules and regulations mean in practice to communities and societies —and yes, society does exist, particularly in east London.

The Government are ignorant of injustice, but they must be conscious of it. If the Government are ignorant, they must accept that, and the injustice must be remedied. If the Government are knowledgeable of that injustice, they must remove it, because they would not want that millstone to hang around the necks of children into the next general election.

Mr. Graham Riddick: From the hon. Member for Eastbourne (Mr. Bellotti) we heard the usual Opposition parrot cry for more money. The hon. Gentleman said that there was not enough money in the pot, and we have heard similar noises from other Opposition Members. The one difference between the hon. Member for Eastbourne and other Opposition members is that his party deserves credit for having the honesty to say that it would increase taxes. The Labour party denies that it would increase taxes to pay for the enormously boosted local government spending that it advocates.
This is the last year of the community charge or poll tax. I do not particularly like the council tax, but I like it a lot more than the alternatives—the poll tax, which is going; the rates, to which Labour advocates a return; and the Liberal Democrats' local income tax. The council tax will be seen as sensible and fair. A return to a rates system —something that the Labour party would regard as fair —would unleash an explosion of local government spending. People who have significantly improved their homes and those who live in houses with high market values would be penalised enormously. Of course, that is exactly what Opposition Members want.
As usual, the Liberals try to pretend that butter would not melt in their mouths. They advocate a local income tax. The hon. Member for Eastbourne smiles sweetly, just to prove the point. I am sure that my constituents would not want the Kirklees council to have access to their tax returns. In any case, a local income tax certainly would not be cheap. On the basis of the current spending of Kirklees council, a working couple on average incomes would pay £850 to £900 a year.
The systems being advocated by both Opposition parties have a common additional flaw: they would both remove the capping powers of the Secretary of State. Once again, it would be party time for Labour local authorities. We know how socialist politicians love to spend other people's money. Both main Opposition parties would give those politicians the green light to do exactly that. I have no doubt that, in this respect, the Kirklees local authority would be no different from other high-spending Labour authorities.
In my part of the world, the scare stories for the next financial year have already started. On the one hand, council leaders are threatening to increase the poll tax by 17 per cent.; on the other, the chairman of the education committee is promising cuts in the education service.

Mr. Pawsey: Disgraceful.

Mr. Riddick: Indeed it is disgraceful.
Those education cuts are proposed despite the fact that the education standard spending assessment in Kirklees has been increased well ahead of inflation and the fact that Government grants to Kirklees as a whole are to increase in line with, or slightly ahead of, inflation. The trouble is that Labour's scare stories have a nasty habit of coming


true. I very much hope that Kirklees will stick to the Government's guidelines and set a poll tax of no more than £257, which would represent an increase of 7 per cent. Local people would not like it, but I think that they would regard it as fairly reasonable.
It would be an absolute disgrace if Kirklees socialists were once again to cut the education budget, as they are threatening to do. A number of schools in my constituency are struggling to make ends meet. There are two main reasons for this. First, Kirklees council, which is run by the Labour party, cut the education budget last year. Secondly, the local education authority is holding back far too much money for its own central administration. Far more money should be passed down to individual schools.
There are two further reasons for the fact that schools provision—indeed, the authority's budget as a whole—is under pressure and for the fact that Labour authorities throughout the country are setting community charges higher than those of Conservative authorities. First, there is poor management of the available resources and of the services that are provided. Secondly, many Labour authorities set wrong priorities. The rent arrears in Kirklees amount to more than £4 million. It is disgraceful that that money has not been collected. Almost 1,000 council houses are empty.

Mr. Pawsey: Does my hon. Friend's council have a housing problem?

Mr. Riddick: Indeed we do have a housing problem, to which I shall refer later.
On the question of management, I should like to relate an interesting little episode. When it comes to the repair of local roads, the local authority has insisted that it will carry out permanent reinstatement. I have discovered that between £2·5 million and £3·5 million is awaiting payment to the Kirklees council by utility companies. The reason for the delay is that the council has not yet carried out the permanent reinstatement. Some of the work has been outstanding for four or five years. That is pure bad management.
Let me come now to priorities. Like many other Labour authorities, Kirklees council spends almost £1 million on equal opportunities projects and peace committees. Recently, it advertised in the local newspaper six vacancies for equal opportunities officers. I estimate that the cost of that advertising is about £250,000. Secondly, the joint venture company that Kirklees council and a private company have set up is costing an amount well into seven figures. But the joint venture company is not developing derelict sites; it is developing decent sites that could quite easily be developed by private undertakings.
Another interesting fact is that housing associations have lost about £12 million-worth of investment in Kirklees over the past five years. Let me explain why. The council's Labour group is, or has been, very hostile to housing associations. As a result, it has refused to co-operate with the Housing Corporation and the associations. The £12 million that could have come to Kirklees has gone to other local authority areas in the north of England. It is an absolute disgrace.
Let me refer to another interesting local issue. The council is imposing smokeless zones on rural areas, at a cost, this year, of £250,000. This is highly unpopular and

totally unnecessary. I should like to go into more detail, but I am running out of time. [Interruption.] It is difficult to hear hon. Members.

Mr. Pawsey: My hon. Friend is not missing much.

Mr. Riddick: I can quite believe that.
I have heard people say that many young electors have never experienced a Labour Government. What is more, many people have forgotten what a Labour Government are like. I shall tell my constituents that they have had a taste of Labour government in the shape of Labour local authorities up and down the country. At the general election, my Labour opponent will be the leader of the council. I am very happy about that, as I shall have an opportunity to demonstrate that a Labour Government would mirror the antics of Labour local authorities. They would put taxes up as high as possible. It would be profligacy—the expenditure of money on all sorts of madcap schemes. I am confident about the outcome.

Ms. Joan Walley: I am sick and tired of hearing Conservative Members attack Labour-controlled local authorities. We just heard such an attack from the hon. Member for Colne Valley (Mr. Riddick). We heard from the hon. Member for Nuneaton (Mr. Stevens) what is likely to happen in Warwickshire.
My main purpose tonight is to explain what the settlement, if confirmed, will mean to Staffordshire, where we could be talking about £20 million-worth of cuts, a large proportion of which will have to be found from services. Much will depend on how much can be found locally from reserves, but I fear that as a result of the Government not listening to Staffordshire's representations, we could suffer cuts locally of up to £12 million. The people of Staffordshire, including those I represent, should not have to suffer cuts of that magnitude.
It is clear that if the people I represent lived in a county such as Bedfordshire, instead of experiencing an increase of 29·4 per cent. in their standing spending assessment, they would get as much as 45·4 per cent. more. It is not as though the Secretary of State is not aware of the concerns in my area. Delegations and representations to Marsham street from Staffordshire county council have set out those concerns in no uncertain terms. Indeed, it seems that the Secretary of State has not only not listened to our concerns but has not even taken note of the views of his Government colleagues.
Special difficulties have arisen in Staffordshire as a result of the pindown affair. All concerned have been critical of what happened in that case. I pay tribute to the work that Staffordshire county council is doing now in trying to put right what was clearly a wrong. In that process, discussions have taken place with various Ministers, including with those at the Department of Health. There has been much sympathy from the Government about the way in which the wrongs of pindown must now be put right.
That being the case, how can it be that, in addition to not listening to the representations from Staffordshire county council, the Minister has not heeded the advice of his Government colleagues? They have said that they share our concern about the additional resources arising out of the pindown experience which must be made available within the local services budget to meet the costs of


additional training and so on for those in need of social services. None of those extra resources will now be available to Staffordshire as a result of the SSA.
Presumably the Minister has not heeded the views of the Secretary of State for Education and Science. It is clear from letters that I have received from parents and others, and in representations made to me at meetings with local head teachers—it seems as though I have been locked into such meetings for whole weekends—that the Secretary of State's pronouncements about the national curriculum and the need to improve educational standards will not be implemented in Staffordshire because of this SSA fixed by the Government.
I am anxious, in the limited time available to me, to consider comparative spending in other areas because the debate is not simply about the overall amount of money available. It is about the distribution of that money and where it should go in terms of social need. We in Staffordshire have a combination of a rural area with high needs combined with the inner-city area of Stoke-on-Trent, which receives little recognition from the Department of the Environment.
The Government should explain why the SSA that has been set will enable Staffordshire to spend only £23 per child within the social index, when some authorities can spend as much as £220 per child. That state of affairs cannot be right. What has Staffordshire done to deserve such treatment? 
We hear much about care in the community, about how we shall need to provide more from the social services, and, at the same time, do more to help the carers. I hope that it will not be necessary for Staffordshire county council to go ahead with its proposal to close Tan-y-Bryn, a place of respite for the disabled and their carers. There are proposals to close two workshops for the blind and disabled serving the entire county area, one in Fenton and one in Newcastle-under-Lyme, each of them providing employment for a large number of my constituents. I have visited the workshops and spoken to the people there. I hope that, in the process of setting its budget, Staffordshire county council will find a way to save those workshops. Let it be known that, if they have to close, the blame must be laid squarely at the door of the Government.
I have never received so many letters from pupils, parents, governors and head teachers about education issues. At a time when we are hearing so much about the delivery of the national curriculum, it is being asked locally how it will be possible for Staffordshire to undertake the extra commitments when it may be forced to make cuts of as much as £7 million because of the SSA set by the Government. How will my area finance as many as 400 teaching redundancies? About 190 have already been notified to the Department of Employment.
Imagine the effect of those redundancies on children's education in Staffordshire. I am almost having to write to myself on the subject, for my children go to school in Staffordshire. The local budget has already been reduced. We recently had one of the lowest staying-on rates in the country. Gradually, those rates are being improved by the county council. Schools had to accommodate increased numbers without extra money. Now we seem to be crucified by the Government for making those improvements.
The people of Staffordshire are angry. They do not deserve the cuts that are having to be made. As I say, we have visited Marsham street to make our case, as we have

in the past, but nobody listens to us. The Government should redistribute money rather than remove it from areas such as mine. More money should be allowed to Staffordshire because we cannot afford to make the cuts that are being demanded.
Had Staffordshire been another area, such as one of those selected by the Government in their positive discrimination towards some county areas, my county council could receive as much as £38 million more. That would be extra money to spend on necessary services. Instead, we could be suffering cuts to the tune of £20 million. Those cuts will hit us hard. It is impossible to consider cuts of that magnitude in expenditure on highways, schools and the social services without admitting that people will be hit hard.
The people of north Staffordshire appreciate that the Government are responsible for those cuts being made. We all want to do all we can locally to cushion the blow. I hope that the Minister will at least address the problems that we in Staffordshire are experiencing, particularly over pindown, and say that the Government will listen to some of the representations that have been made by Staffordshire county council.

Mr. Michael Carttiss: To many people the annual debate on the RSG settlement must be one of the most boring in the House. I rise with no great expectation that the next 10 minutes will add anything to the interest of these proceedings [HON. MEMBERS: "Shame."] However, it is one of the most important debates that takes place in this Chamber. My right hon. Friend the Secretary of State was absolutely right in emphasising, when he opened the debate, that the House should explore thoroughly how £33 billion of taxpayers' money is spent.
Local council spending touches the lives of our constituents more directly than does almost any other item of expenditure upon which Parliament has to vote each year. It is inevitable that the Government should seek to control local authority spending, given the proportion of the gross national product devoted to local government services.
My hon. Friend the Member for Nuneaton (Mr. Stevens) recalled the former Labour Secretary of State, Tony Crosland, saying many years ago that the party was over in local authority spending. With a large Conservative majority on Norfolk county council in those days, we did our best to follow the Labour Government's programme of restraining local council expenditure. That, I might add, was in the teeth of the opposition of the Labour group at county hall. I recall our sending a deputation in 1979 to protest about the rate support grant settlement announced by the then Secretary of State for the Environment, my right hon. Friend the Member for Henley (Mr. Heseltine), who is now back in that job.
Seven years ago, I made my maiden speech in the RSG debate and, while I sought to observe the convention of not being too controversial, I could not avoid criticising the way in which the Conservative Government, just elected, had treated the Conservative county council in Norfolk. This may be why these annual debates on local authority expenditure are boring: we have to keep on saying the same thing over and over again. Here we are with another RSG settlement that is patently unfair in the


way it treats the people of Norfolk, who send to this House seven Members in the Conservative interest, of whom three are prominent members of this Administration on the Treasury Bench.
I wish that the accusation by the hon. Member for Dagenham (Mr. Gould) that the Secretary of State helps Tory authorities over and above Labour-controlled councils was near the truth. It is not true for Shropshire, as my right hon. Friend the Member for Shropshire, North (Mr. Biffen) said. It is not true for Warwickshire, as my hon. Friend the Member for Nuneaton said and as my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) will have a chance to say later. It certainly is not true for Norfolk.
On 9 December, the county treasurer's report to the county council about the RSG provisional settlement, announced by the Secretary of State on 26 November, concluded:
Overall, the proposed settlement can be described as a difficult one which hopefully, subject to the level of future pay awards and inflation, will enable us to maintain our existing services"—
that is loyalty, and I draw it to the attention of my hon. Friend the Minister for Local Government—
but which is unlikely to leave any room to tackle many, if any, of the new demands on our services.
Norfolk's provisional SSA for 1992–93 was£446·460 million, which was a 6·8 per cent. increase over the 1991–92 figure of £417·945 million. That is a cash increase of £28·515 million, for which we are very grateful. This increase for Norfolk of 6·8 per cent. compares with the average increase nationally of 6·8 per cent.—so we are on a level playing field there—but the average county increase —and, as my hon. Friends representing shire counties have said, which shire counties have benefited remains to be seen—has been 7 per cent. The figures for the neighbouring East Anglian counties, which have much in common with Norfolk, are: Cambridgeshire, 7·5 per cent., Lincolnshire, 6·9 per cent., and Suffolk, a disastrous 5·9 per cent.
However, the settlement announced on 24 January robbed Norfolk—that is, my constituents—of about £0·5 million. The county council confidently expected an increase because of the change in the rules which allows any addition to the police establishment—and we had an increase in our police establishment, approved by the Home Secretary—to be included in the first year; normally a council would have to finance the first year on its own. Despite this, Norfolk's RSG has gone down by nearly half a million pounds, and the capping limit is reduced in line. This reduction at this late hour, as the leader of the Norfolk county council has pointed out, makes a nonsense of sound planning. It also undermines the claim by spending departments in Whitehall that it is all in the SSA.
Incidentally, Cambridgeshire, which had the most generous settlement announced in November for the East Anglian counties, has gained from the January settlement. So a relatively poor county such as Norfolk has lost money to a rich area such as Cambridgeshire. I am sure that has nothing to do with the fact that one of the Members for that county is my right hon. Friend the Member for Huntingdon (Mr. Major) and another is my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant).

Sir Anthony Grant: If what my hon. Friend says is true, and I am sure it is, does he not find it absolutely astounding that, with one accord, Labour and Liberal politicians in Cambridgeshire have been spending months complaining how mean the Government are, and are still doing it?

Mr. Carttiss: What people in Cambridgeshire do does not surprise me, especially the Liberal and Labour people there. Fortunately, there are not many Liberal and Labour people in Cambridgeshire.
The hon. Member for Eastbourne (Mr. Bellotti) drew attention to the effect of the teachers' pay award. Norfolk has a relatively low SSA, and the county council has had minimal room for manoeuvre within its budget, bearing in mind the pressures that we have in our county from a rising local population and additional crime. The teachers' pay award will cause budgetary difficulties if it is significantly above inflation and if the Government do not then make the appropriate upward adjustments to the SSA and the RSG.
As a former member of the teaching profession, I am very happy for the Government to approve a pay award above the rate of inflation, but they must make that extra pay award feature in the RSG settlement. In other words, Her Majesty's Treasury must look after that above-average pay rise, if it comes, and not expect local authorities to find that extra money from within their own budgets at the expense of other services, given the point that has already been made about local authorities having no say in or control over that item of expenditure.
Speaking of teachers prompts me to comment on the capital allocation for education in Norfolk, which has been limited to £3·1 million. That is an extremely low allocation, particularly compared with our neighbours in the rest of East Anglia: Suffolk, education capital allocation £11·3 million; Lincolnshire, £12·4 million; and, once again, Cambridgeshire £13·9 million. Norfolk, I repeat, has only £3·1 million. It would be monstrous if, having spent just above SSA, we had charge capping.
I have one minute left, I am advised, to draw the attention of the House to the problem that arises from sea defences. The people of Great Yarmouth and Norfolk are not expected to pay for the Navy. The last time that we helped with the cost of the Navy from our local expenditure in Yarmouth was in 1338, when the town magistrates provided money for men-of-war against the nation's enemies. In 1340, we provided half the fleet for Edward III's battle against the French at Sluys, which we won.
Flood defences are a nationwide responsibility, as they should be, yet they feature within the local authority budget. If the Yarmouth borough council spends over its SSA, including the cost of sea defences, it will lose money.
No doubt, Mr. Deputy Speaker, you will call me to order when I reach the absolute limit of my time, but I want to say that in Great Yarmouth we want to spend £150,000 on a coastal strategy defence study. The Ministry of Agriculture, Fisheries and Food will eventually pay for it. MAFF is constantly urging us to increase expenditure. The levy from the National Rivers Authority is 8·7 per cent., yet the Department wants to limit us to 6·5 per cent.

Mr. Deputy Speaker (Sir Paul Dean): Order. I am sorry, but I must call the hon. Gentleman to order now.

Dr. Ashok Kumar: I wish to highlight the major impact that the Secretary of State's announcement on standard spending assessments will have on the local councils that cover my constituency.
My constituency is served by Cleveland county council and two borough councils, Langbaurgh and Middlesbrough. Those model local authorities have all been the subject of favourable comments by the district audit service. I am proud to say that they are all controlled by the Labour party, as demonstrated by their continuing electoral success. They will all be severely affected by the Secretary of State's announcement.
Langbaurgh borough council has been allocated an SSA increase of 1·5 per cent. and Middlesbrough borough council's SSA has been decreased by 0·2 per cent. The chief executive of Cleveland county council, in a letter to me dated 20 January, said that the SSA announcement for Cleveland county council has
required some very difficult decisions. The need to stay within the overall limit is complicated very substantially by the pressures arising from other government legislation, especially in Social Services where the implementation of the Care in the Community and the Children Act are estimated to cost £4·9 million in the perfect world".
He goes on to say that, unfortunately, we do not live in that perfect world—how right he is—and that only £1·6 million can be spent in those areas. That budget decision will adversely affect some of the most vulnerable in our society—people living institutional lives and young children, possibly in peril. The fact that new duties have been imposed on local councils while cuts have been made in resources is plainly an example of double dealing.
The chief executive of Cleveland council also tells me that he is "unlikely" to be able to meet new statutory legislation for trading standards inspections and that he will be unable to recommend the allocation of additional funds to schools for the implementation of future stages of the national curriculum. That means that our children's futures will suffer and local people may find that the consumer watchdogs on which they rely to protect them from sharp practices will be left toothless—a grim prospect.
Although the position within local councils is obviously grave, amazingly, Cleveland county council is comparatively fortunate because its SSA is relatively close to its actual expenditure under the arcane Department of the Environment rules apparently agreed to by the Secretary of State. For the two borough councils in my constituency, the situation is far worse. Langbaurgh is perhaps the worst affected, being in the unique position of covering some of the poorest urban areas in mainland Britain and an ex-mining area of rural villages. Consequently, it is designated by the Government as both an urban programme authority and a rural development area, a position that is unique to Langbaurgh. I hope that that gives hon. Members some idea of the problems with which that authority must grapple.
The announcement of an SSA for Langbaurgh of £12·16 million—an increase of 1·67 per cent. over 1991–92 —has come as a body blow to Langbaurgh. That is not a knee-jerk reaction. The council previously employed a leading firm of accountants, Peat, Marwick, McLintock, to examine the SSA and its impact on the authority. The accountants found that the low SSA was due to two specific factors. The first is the ward-weighted density

factor. Langbaurgh has undergone a ward boundary exercise, but the new wards were not used by the Department of the Environment. Peat, Marwick, McLintock argued that the use of census enumeration districts would give the Department a better picture of the borough's needs. Secondly, the all-ages social index lost the borough some £1·2 million, whereas the borough had expected to gain because of its pressing social problems.
Langbaurgh cannot use its reserves, because almost all of them have been used to alleviate heavy payments in last year's budget exercise. The district auditor has told the council that the balances are now dangerously low and should be increased from £500,000 to £1 million. That is a difficult, if not impossible, task to accomplish, but it has not deterred the Secretary of State from telling Langbaurgh that he is ready to use his capping powers, which would discriminate against some of the poorest people in one of the poorest boroughs in Britain. If the rules are not relaxed, people in Langbaurgh will suffer this winter.
Langbaurgh's grim problems will intensify as the full impact of the recession begins to bite. In the past year, we have continually seen news of sackings in the borough's traditional industries of steel and chemicals. Those sackings come on top of the already high unemployment figures, which, incidentally, are not used in devising the borough's SSA and they can only mean more pressure on the borough's local services and council aid.
Middlesbrough, too, will suffer. Along with Langbaurgh, it has all the problems associated with long-term unemployment, poverty and ill health, It wants desperately to work to remedy those social evils and create a living environment that is fit for the 21st century.
Given that the statutory housing responsibilities of Langbaurgh and Middlesbrough borough councils are effectively ring-fenced, their grave problems have led to a new round of rent rises, and their highways duties are managed on an agency basis for the county council. That can only mean massive budgetary cuts in their work in non-statutory areas.
Another aspect that will have a severe impact on our people is the possible loss of bus passes, which will be particularly resented by local senior citizens in my area. The secretary of the Cleveland Pensioners Association said that any cuts
will have a devastating effect on old people.
For some, it could mean virtual imprisonment in their own homes and a charge in their daily lives that could mean a difference between life and death.
Two weeks ago, a typical local senior citizen visited me in my surgery. Tom Miller lives in the village of Carlin How in east Cleveland and suffers from heart and chest problems. He told me that the withdrawal of bus passes would make him and his wife virtual prisoners in their village. For Tom Miller and his neighbours, many of the facilities that we take for granted, such as visiting a doctor, supermarket or local market, involve a bus journey of many miles. Mr. Miller has written to the Secretary of State for the Environment, and I hope that the right hon. Gentleman's reply will not be an attempt to fob him off with the usual feeble rhetoric or an attempt to divert the blame on to our hard-pressed local authorities, because Mr. Miller and his neighbours have already rumbled him.
Only last week, I attended a public meeting of senior citizens who expressed deep anxiety about the cuts in Langbaurgh borough council's SSA. The council's work


and that expression of local pride and autonomy are threatened by the Secretary of State's announcement. The real agenda is obvious. At heart, the Secretary of State does not like the idea of local people deciding their futures and destinies. At heart, he is still an enthusiast for the view that the man in Whitehall knows best, so long as that man is the Secretary of State for the Environment.
I give the Secretary of State notice that, in a few short weeks, his record and views will be judged by the electorate. From my day-to-day work and my life in my constituency, I know what the verdict of the thousands of local voters living in Middlesbrough and Langbaurgh will be. They want an end to the callous disregard for local government, and an end to the Government who have fostered and nurtured that disregard.

Mr. David Martin: Any debate on local government finance is liable to tax people's understanding even more than central and local government tax their purses. It is an arcane subject, mainly because central Government pick up the lion's share of the bill. There is therefore a complex relationship between local and central Government at the heart of which is the revenue support grant system, SSAs and all the rest, with a myriad mathematical equations, incomprehensible to normal people, amongst whom I count myself.
Therefore, I intend to take a broad-brush approach in raising first a specific matter involving local government structure and expenditure, where change could be made to achieve a cheaper system, more accountable to local people and less expensive in central Government grants. Too many powers are exercised by county councils which ought to be carried out more locally. I appreciate that the Local Government Commission is being created to investigate the best future structure for local authorities. I very much welcome that.
In the meantime, however, county councils continue to exercise very wide overlapping planning powers which brings them into conflict—sometimes serious conflict—with district or city councils which also have fully-fledged planning departments. It is true, of course, that the system allows for an application to my right hon. Friend to call in a planning application so that conflicts can be resolved. However, this is a most expensive procedure which falls on local charge payers and on the grant system.
There is a good example of serious planning conflict in Portsmouth in the constituency of my hon. Friend the Member for Portsmouth, North (Mr. Griffiths), who cannot be here because of Select Committee duties. The problem affects his constituency, but also mine because many of my constituents live in the vicinity.
In Quatremaine road, Hilsea, there is a waste incinerator site. On it stands an incinerator which has been shut down. Adjoining the site is land belonging to Portsmouth city council. A planning application is before the county council, the planning authority—not Portsmouth city council—for an enormous new energy-from-waste incinerator. Its size and scale are such that it would require also the adjoining site belonging to the city council which would need to be compulsory purchased.
The new incinerator would dominate the landscape like some hideous, belching, secular cathedral—tower, chimney and all.
Portsmouth city council is unanimously against it, not on the ground that Portsmouth is not prepared to see a reasonable size state-of-the-art waste disposal system on the existing site which will deal with the waste of Portsmouth and perhaps Havant, Gosport and Fareham too, but because the proposal is intended to deal with waste from all over Hampshire, and no doubt from West Sussex as well under contract, with the massive environmental impact that will have, not least on a densely populated residential area but also on the road system. Portsmouth wants other areas to take responsibility for their waste disposal and not have it all transported in one direction.
That is precisely the sort of example which underpins my conviction that dual county-city planning powers should not exist. Further, if on 9 March the county council planning committee does not take account of the strength of feeling in Portsmouth by rejecting the proposal, it will serve as the most eloquent support from Portsmouth to look after all its own council affairs again, as a unitary authority, rather than being subsumed in a remote, out-of-touch, over-blown, administrative and political structure in Winchester which costs far too much money —our money—for all the good it does.
Incidentally, sensible local government reform is one of the best reasons for supporting the return of a Conservative Government at the general election. The proposals of the Labour and Liberal parties would result in a whole new tier of regional government—heaven forbid —with all its increased bureaucracy and bloated cost in grant and so on.
In Portsmouth, where we have a Labour administration propped up by Liberals, we have learnt the lesson that I hope the whole country will heed: there is nothing to choose between Labour and Liberals. There are two ways of getting Labour national or local government—by voting Labour or by voting Liberal. Just as in local government their policies are barely distinguishable, in this place eight out of 10 times they vote in the same lobby.
In another area of local government expenditure which involves considerable central taxation support—housing —housing revenue account subsidy and housing investment programme capital grants are only obliquely connected to revenue support grants, but a council's housing policies and programmes have a great impact on taxpayers and local charge payers.
Portsmouth has not only done well this year out of the revenue support grant but also the HIP allocation, which in a difficult year has risen by 3 per cent. in real terms— recognition by the Government of the extra help required and deserved to meet housing needs in Portsmouth. To its credit, the Labour administration has continued the sensible housing enabling strategy of its Conservative predecessors, hence the increased Government support. Of course, we shall never get to the bottom of housing need, however deeply the taxpayers and charge payers dip into their pockets, until we mobilise the private sector by taking a further look at the destructive workings of the rent Acts in that vital area.
The Labour party and the Liberals suggest that housing needs could be met by a new spending spree, including allowing councils to spend all the proceeds of council home sales, which in their hearts they still oppose, instead


of having the present restriction of 25 per cent. of the product of such sales. Allowing 100 per cent. expenditure would certainly lead in the short term to more council houses being built. However, apart from the horrendous effects on public expenditure and inflation, it would have only a temporary influence on waiting lists. As we saw in the 1960s and 1970s, virtually unrestricted council building just does not cure waiting lists and brings in its wake massive debt and expenditure on maintenance to be borne by future generations. We are still paying off the massive debts built up in that era, when it was thought that those policies would cure the housing problem.
The enabling policies being pursued at present, with sensible building for particular social purposes in partnership with housing associations, is sensible and defensible. I am glad that those policies are being carried out in Portsmouth, with Government grant to help in various ways to address the problems of the city's homelessness and inadequate shelter.
The revenue support grant system will never please everyone, but I am delighted to pass on to my right hon. and hon. Friends the news that their support for Portsmouth has been noted.

Mr. Ian McCartney: I always enjoy following the hon. Member for Portsmouth, South (Mr. Martin), not just because occasionally we are paired, but because he is never one to underwhelm the House. He puts his case boldly and fully, although I rarely agree with what he says. However, he is one of the few Conservative Back Benchers whose views on local government are clearly understood by the Opposition.
In the past four months, the Minister of State and I have spent much time together, in Committee on the Local Government Finance Bill and the Local Government Bill, and also in discussions in his office in Marsham street. So that I do not put him to sleep, I do not intend to go over the ground that I have already covered with him about my own authority.
I wish to highlight the reasons why my local authority, with other metropolitan authorities, feels let down by the Minister of State's announcement about standard spending assessments. The views that I shall express have already been expressed by others, such as the local chamber of commerce, the leader of the Conservative group in my local authority and The Times.
Recently, The Times did a survey of local authorities, covering value for money, quality of service, efficiency of service and the way that Government perceives the development of services. The Times found that Wigan borough council gives value for money and that its services are run efficiently. In answer to questions, Ministers use my local authority as an example of best practice to other local authorities on how to run departments such as education, housing and social services. However, for the second time, my local authority will face substantial cuts of more than £10 million in its budget. In the past two financial years it has had to cut £37 million from its budget simply because of the way in which the Government calculate standard spending assessments.
On Monday 3 February, under the heading "Spending curbs land thrifty Wigan with 20 per cent. poll tax rise", The Times local government correspondent said:
Wigan, run by Labour moderates,"—

the Minister of State knows from my speeches in Committee that I am a moderate person who always puts his arguments moderately—[Laughter.] I knew that hon. Members would be tickled by that—
has become a by-word for the inadequacy of the grant system. Praised by ministers and the Audit Commission for its efficiency, the borough council has had to make £37 million worth of cuts in the past two years. It has been forced to shed 1,250 staff from a workforce already smaller than the national average and spends less on services than many Conservative councils. It also has one of the best records of poll tax collection.
The authority also has the third lowest level of council house rent arrears. It has proved to the Government time and again that it provides value for money in the way that it manages and produces its services.
However, last night my local authority was meeting in emergency session to decide where to make substantial cuts that will include redundancies of about a further 1,000 staff in the housing, direct labour, community care and education departments. There is the possibility of hundreds of teachers being made redundant in order to meet the Government's spending targets. Given the funds it receives and the amounts allocated in SSAs, how can my authority provide the same level of care for children at risk as Wandsworth council, which receives eight times the amount of grant? 
Just a few miles down the road is Manchester, another inner urban authority. My authority receives less than £900 per person to spend on local services, while Manchester has £1,448. Yet my regional authority is placed twelfth out of 104 in terms of the number of GCEs obtained. It receives £510 per head for local schools, compared with an average of more than £700 per head in the other metropolitan authorities, including the inner London authorities, which receive many hundreds of pounds more to provide the same basic services.
How can an authority that is so efficient in the level and spread of services it provides find itself losing millions of pounds of resources due to the way in which the Government calculate SSAs? I am not the only one to be puzzled; The Times agreed with me. The chambers of commerce also agreed, and when their representatives met the Minister of State, they made it absolutely clear that they supported the authority and were dismissive of the Government's attitude to SSAs. They said that the Government's position was undermining the local economy.
The representatives understand that many of the services provided by the local authority are supplied in conjunction with the private sector. When the authority has substantially to reduce its service budgets, the people to lose will include not just those who receive the services, but local companies involved in the tendering to provide those services.
Councillor Chadwick, the leader of the Conservative group on Wigan borough council, agreed that the way in which the SSAs are calculated was wrong. He agreed with the authority that the Government are manipulating and massaging the figures to produce the assessments, to the detriment of authorities such as Wigan. He was bitterly disappointed at the failure of the Minister of State to show any recognition of the level, delivery and value for money of services provided by my local authority.
Therefore, it is clear that not just the Labour party, but local industry, the local Conservative party and a Conservative-backed newspaper—The Times—hold the


same views. One cannot get a broader consensus. The Minister cannot say that the view is held only by the bleeding hearts of a socialist council, supported by Labour Members of Parliament. Many local authorities in the north, in Yorkshire, Lancashire and particularly Greater Manchester are aggrieved as they witness the effects of SSAs, which always result in their receiving a lower level of grant.
In previous debates the Minister has alluded to the marked discrepancy in the way in which SSAs are calculated. In meeting with the local authorities he recognised that there is a need to consider marginal aspects, but he is not prepared to accept the substantive argument that major problems exist. As a result, growing numbers of local authorities are being caught in the net of the SSA calculations which do not take into account the large, rural hinterlands attached to many metropolitan boroughs, the social deprivation of many of those boroughs and the fact that the transport system precepts now come out of the district council local budgets.
We in Wigan have to pay the capital cost of the new rail link to Manchester airport and the introduction of the metrolink in Manchester. That is because the Minister of State, in his days at the Department of Transport, removed the precepting powers of the Greater Manchester transport authority. As a result, if Wigan wants to maintain its bus system, it must take the money from schoolkids, pensioners, industrial development and the promotion of jobs—the same is true of Yorkshire. If money is not taken from those sectors, the investment in public transport will be dramatically reduced. Either way, local authorities cannot win.
I see that the light is flashing, which means that I must sit down—and Mr. Deputy Speaker is making circling hand signals for me to sit down. I feel as though I am in a television studio.
If not this evening, then at an early stage in Committee, will the Minister of State give us an idea of when the Government will take seriously the issue of SSAs and look for a change in the system? The Minister has the excuse of the introduction of a commission to review local government. Therefore, he could take that oppportunity to change the SSA system.

Mr. Kenneth Hind: Local government in many parts of the country has still not accepted the words of Mr. Anthony Crosland about the party being over for local government spending. However, this local government spending settlement is reasonable, and the Government have been more than generous to local government. Total spending for 1992–93 is £41·8 billion —an increase of 7·2 per cent. That represents the maximum amount that the Government think it will be necessary for local authorities in England to spend in 1992–93 to provide a standard level of service.
In order to encourage local government, we must ensure that we get the best value for our money—that is what it is all about. It is not good enough to say, "Spend, spend, spend"; consideration must be given to obtaining good value.
The hon. Member for Makerfield (Mr. McCartney), like many Opposition Members, constantly whinges about

the amount of Government grant. He does not apply his mind to the issue of generating the tax income that goes into local authority expenditure or consider the community charge payer, who has to fork out for those services, or the income taxpayer and business taxpayer, who have to provide the money, through the Treasury, to make up the grant. One must generate wealth to spend it, and only my right hon. and hon. Friends understand the necessity to create the financial resources that allow grants to be made.
Overall standard spending assessments have increased by 6·8 per cent., which is well above the rate of inflation. Local government should be able to live with that figure. The average increase in respect of specific grants—such as for the police—is even higher, at 11·9 per cent. The increases in most SSA totals are also well above the inflation rate—14·7 per cent. for the police; 15·2 per cent. for all other services; 8·3 per cent. for fire services; 7·2 per cent. for social services; and 7·1 per cent. for education. Those major increases reflect the circumstances and represent a prudent and sensible settlement.

Mr. McCartney: The hon. Gentleman should tell the truth.

Mr. Hind: I will tell the truth also about Labour-controlled local government.
A large number of whingers in local government and in the House constantly complain about spending levels, but they never worry about how the money will be raised or about the impact that higher expenditure will have on the individual and the business community.
The authorities in the top 20 for uncollected rent are all Labour controlled. Liverpool is sixth, with some 26 per cent. of its tenants behind with rent totalling £16·4 million. Imagine what a local authority could do with that sum. Labour-controlled Preston is in 16th place. Some 9 per cent. of its tenants owe rent totalling £1·56 million.
Of the 20 local authorities with the highest proportion of empty dwellings as a proportion of their total housing stock, Liverpool has 9·7 per cent. of its properties vacant; Manchester, 6·47 per cent.; Salford 6·23 per cent.; Burnley, 5·84 per cent.; and Knowsley, on the edge of my constituency, 4·49 per cent.

Mr. Irvine Patnick (Lords Commissioner to the Treasury): Not to mention Sheffield.

Mr. Hind: My hon. Friend is right, because Sheffield also has one of the worst records in that respect.
At a recent local government conference, the hon. Member for Dagenham (Mr. Gould) complained that the 1989–90 revenue support grant was £6 billion to £7 billion short of the sum needed. Is that a measure of the amount that a Labour Government, in the unlikely event that one were elected, would ask the electorate to pay? That would require a tax increase of 2p or 3p in the pound. We should add that to the £37 billion of excess spending that Labour has promised in its documents and in the House.
We must consider also the impact of Labour's local government proposals on those who would have to pay. Labour would end tendering for services, which would create a large loss that would have to be met by the council tax or whatever form of rates applied. Labour would also sweep away the Audit Commission, which identified £1·2


billion of potential local government savings and has seen £650 million of them actually achieved. Under Labour, there would be no watchdog to exercise such control.
Labour would create large numbers of new quangos, with all their excessive costs, and increase costly new bureaucracy at the expense of the local taxpayer. Above all, Labour would abolish the capping restrictions that Parliament placed on local authority spending, which protects local government taxpayers from being milked and imposes a degree of necessary prudence. In the past, certain local authorities served as milch cows for irresponsible left-wing councillors. They did little for the community, but drove out jobs.
The uniform business rate is controlled by central Government and is currently set at the rate of inflation. Labour would hand back the uniform business rate to local authorities. In the late 1980s, we saw in places such as Liverpool and Manchester a sharp increase in business rates. Jobs and investment were driven out, with the consequence that the actual take went down. Massive unemployment followed in those areas, but constituencies such as mine benefited from businesses moving from profligate, high-spending Labour-controlled areas to low-cost areas run by Conservative councils, where they could make better profits, expand, invest and create new jobs.
The future under Labour would be spend, spend, spend. Local authorities already spend an enormous amount of money and certain limits must be imposed. We must ensure responsible control if there is to be sensible local government budgeting in future.
The capping rules were changed recently and many councils that spent more than £17 million found themselves caught as a consequence of using their investments to balance their budgets. Under the new capping criteria, many of them will be required to reduce their expenditure. I ask my hon. Friend the Minister for Local Government and Inner Cities to allow such councils two years in which to reduce their expenditure to the required level. When my hon. Friend gives that matter his consideration in April, he may agree that that is a reasonable provision.
Capping is a necessary mechanism of central Government, and I am sure that the public recognise that we finance local government sensibly and do not take advantage of those who have to pay local government tax. The public can look to a Conservative Government to ensure that will continue to be the case in future. In those circumstances, I urge all my right hon. and hon. Friends to support the motion.

Mr. Ron Leighton: Our annual debates on local government finance are replete with esoteric jargon and initials—such as SSA, meaning the standard spending assessment. The operative word is "standard". Everything is to be standardised across the country. There is no local decision-making, but everything is centralised; the man in Whitehall knows best. Local manifestos and the wishes of local voters do not seem to matter. Instead, a standard is set at the centre. There is no local discretion or judgment, and democratically elected councils are told what to do. Even committees are told what are their individual SSAs and how much they can spend. All local freedom of choice is eliminated.
How does this affect the London borough of Newham? If it rolls forward its existing programme and does not add anything new, it will spend £11 million in excess of the cap set by the Department of the Environment. It will therefore have to make painful cuts in its services—but not because the council is profligate or loony. First, the capital financing SSA is inadequate. This covers the cost of servicing the capital debt, and to service the capital debt costs £30 million. The borrowing is Government approved, but the Government-approved SSA is only £18 million: there is therefore a £12 million deficit.
Secondly, there is no procedure for recognising the existence of homelessness in the SSA, which is a major problem in my part of the world. Council housing provision has virtually come to an end; there have been many repossessions, and we have many refugees. Homelessness costs my borough roughly £5 million, but, although the SSAs do not provide for that, the Government have imposed a legal duty on us to deal with the problem. So we should have an extra £12 million for capital financing, and £5 million for homelessness—£17 million more.
If my authority had that extra £17 million, it would find itself in a reasonably comfortable position, but instead it is having to make major cuts. A meeting took place last night to discuss the matter. As education represents 50 per cent. of our local expenditure, cuts are inevitable. My area is not doing well in the education league table; the east end is struggling, in difficult circumstances, to raise education standards. Now, however, we are being forced to make these painful cuts.
Parents and teachers object to the cuts. Last night a demonstration took place outside the town hall; my hon. Friend the Member for Newham, South (Mr. Spearing) was present. The councillors, who do not want to make the cuts, are being forced to do so. They are also having to sack members of staff, who are resisting by going on strike: Newham's poll tax department is on strike now.
I congratulate the Minister on having sat through the debate so far, and thank him for his courtesy in meeting us last night. I believe he knows that the people who run Newham council are honest people, and that the council is honest, too. It is not a loony council in any respect; yet, although it is situated in a part of east London that has many problems, it is having to endure these agonies. I wonder that those councillors are even willing to remain in local government. It is not their fault that cuts are being made in essential services, but they are taking the stick. Every night they are barracked by crowds outside the town hall; but they are only the messenger boys—the tools of the Government. They have no local discretion.
The Government do not want local government, which involves discretion and democracy, the issue of manifestos and voting by the local electorate. What they want is more local administration, as applies in the health service: those who run the health service are appointed, not elected—and most seem to be card-carrying members of the Conservative party. They do what they are told; the law is laid down centrally. The Opposition want proper local government.
The story gets worse. There are also the rate refunds resulting from backdated rateable value adjustments. The Minister listened very patiently to our views on that last night. At the time when the rates were abolished, a number of commercial ratepayers had appeals outstanding against the rateable valuation of their properties. Such appeals are


determined by valuation courts. In Newham, the valuation court's decisions have resulted in an estimated reduction of £6 million in rate income. This is on top of all the other problems that I have mentioned.
Let me stress that Newham has no control over the refunds. The original rateable value was set by the Inland Revenue; it had nothing to do with the council. The appeals had nothing to do with the council either. The council comes in only when it has to pick up the costs. This has made the local position almost impossible.
Something must be done. Last night, the Minister was willing to listen to a number of options, and I hope that since then he has come up with a solution. The first option was that the cost of the refunds should be chargeable to the Collection Fund, and be met from the non-domestic rate pool. That is Newham's favoured option. The second was that the cost should be treated as a disregard for capping purposes; but that would merely raise the poll tax level, and I see little point in such a move.
A third option was to ask the Department of the Environment to increase Newham's temporary revenue borrowing limit for 1992–93. That would spread it over two years; I should prefer it to be spread over a longer period. The final option was for the authority to be allowed to capitalise the refund costs. That would help Newham only if the Department provided additional credit approvals to enable the capitalisation to take place, because the council's capital programme is already fully committed. We are asking only for approval to borrow, to make payments staggered over five or six years, so that our position is not made untenable. We are not asking for cash from the Government.
The Minister of State listened very carefully to our submissions, and I hope that he will be able to give some good news to a council that is struggling, in good faith and with the best will in the world, to find a way through its terrible difficulties.

Sir Anthony Grant: I entirely agree with the hon. Member for Newham, North-East (Mr. Leighton): all our debates on local government finance, whether the community charge or the rating system is involved, are a nightmare. That has been true for as long as I have been in the House. It is very difficult for us not to become extraordinarily confused, so I shall confine my remarks to East Anglia; I shall not move an inch north of Norfolk, or take a step along the road to Wigan pier.
I referred to Norfolk because my hon. Friend the Member for Great Yarmouth (Mr. Carttiss) made a powerful speech on behalf of his constituency in particular and Norfolk generally. He pointed out how differently Cambridgeshire had been treated in regard to the revenue support grant. Let me explain the position.
I wish that some of the socialist and Liberal politicians who make such a clamour in Cambridgeshire about the tight-fistedness of central Government were present now. If they had heard not only the speech of my hon. Friend the Member for Great Yarmouth, but those of hon. Members representing such areas as Wigan, Sheffield and so forth, they would have realised that Cambridgeshire's settlement is not at all bad.
For many months, my hon. Friends representing other parts of Cambridgeshire have had to point out that Cambridgeshire has been unfairly treated in the past, because it has been one of the fastest-growing counties in the country. At one time, it was the fastest growing in population terms, because so many people wanted to move to such an excellent place.
I am not saying that we are the fastest-growing area, but we are the fastest growing in terms of population, certainly much faster than Norfolk. We have had a bad deal in previous years, but this year we spent a long time talking to the Government about the problems. I pay tribute to my hon. Friend the Minister of State and to the Under-Secretary, my hon. Friend the Member for Salisbury (Mr. Key) who have been extraordinarily patient and have looked into this in enormous detail and listened to us carefully when we explained the problems.
As a result, we have achieved a 7·5 per cent. increase in RSG, which is a satisfactory solution and a reasonable compromise. We are not top of the list of counties, but we are ninth out of 39 and fourth in the list of shire counties in terms of percentage per head of population. Therefore, we have nothing to complain about. There is to be a 7·5 per cent. increase in education. In that respect, the county council has wisely and sensibly made primary education its priority and has not put the full burden on secondary education. I commend the county council for its wisdom.
The police are important and it is necessary to have an adequate Government precept for them. Cambridgeshire has embarked upon a policy of civilianisation of the police as vigorously as possible under the excellent chairman, Councillor Kenneth Spink. The council has done a splendid job and it is important that it should not be penalised for indulging in civilianisation. It should be praised for doing so, because it is entirely in keeping with proper and sensible Government policy.
I disagree slightly with some of my hon. Friends on the uniform business rate. The many small businesses in my constituency are finding it onerous. It is all very well for people in the north, including Lancashire, to say that it is better than the ghastly things that happened under the old rating system and loony councils in Liverpool and other places. They are certainly better off. However, the uniform business rate bites hard on people in the south and east, and they should not be neglected at times of economic difficulty.
Another issue is the ridiculous area cost adjustment system. That results in the absurd circumstance of Oxford benefiting from that system when Cambridge does not. I have never heard of anything so ridiculous. The reason is that the incredible formula is worked out not on a county basis but on some arbitrary boundaries that result in Oxford and some other parts of East Anglia being caught up in the so-called highly expensive places in the south-east and Cambridge being caught up in the not-so-expensive places. I do not know who drew up those mad boundaries, but it time that the Government looked at them.
I hope that my hon. Friend the Minister will look at this matter, because the boundaries are absurd. It is said, "Oh well, you in East Anglia and Cambridgeshire do not have very high costs." That may be true of parts of north Cambridgeshire and the northern parts of East Anglia, but it is not true of Cambridge, of the rest of my constituency or of that of my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice). It is damned expensive, just as expensive as in Oxford or Hertfordshire.
Huntingdon district council, which is part of my constituency, and Cambridge council are very responsible authorities. Those councils embarked vigorously on the sale of council houses. That is an excellent policy and has given people homes of their own. It has transformed much of my constituency and those surrounding it. Those councils have accumulated a number of balances. As I have said, they are responsible local authorities which run sensible and tight ships. They do not waste money or embark upon lunatic ventures. The time has come for a release of some of that money, the retention of which I find it increasingly difficult to justify. I realise that it is not a matter entirely for my hon. Friend the Minister, but I hope that he will talk to the Treasury and the Chancellor, as I have done, as it is a way to give a much-needed stimulus to the housing market.
On balance, the Department of the Environment has done a good job on the RSG. It is a good team under my right hon. Friend the Secretary of State. The Department has achieved a sensible RSG in times of great difficulty. I have not heard a word from Opposition Members about how they would make it better if they were in office. I leave my hon. Friend the Minister with the message that no situation is so bad that a Labour Administration could not make it infinitely worse.

Mr. Eric Illsley: The Secretary of State mentioned the annual ritual of these debates, and I make no apology for again attacking the standard spending assessments because of the effect that they will have on my constituency. In the past, I have attacked the level of grant that we have received and the standard spending assessment which has denied my area adequate levels of funding. Once again, my local authority is bottom of the list of 36 metropolitan districts. When we ask why we are so low, the Secretary of State says that somebody has to be at the bottom. There is no justification and no sensible argument why my local authority should receive such a low standard spending assessment. In fact, I do not think that the Government know the reason why.
The calculation of standard spending assessments defies logic. Last year, my local authority provided a report that was commissioned by Coopers and Lybrand Deloitte. It was sent to the Minister explaining why we should have a better standard spending assessment. There was no response. I am sure that all the representations from Opposition Members will meet a similar fate.
The revenue support grant is tied into the Government's calculation of total standard spending assessments. After we remove special grants from the total figures, the total SSA for 1992–93 shows a 6·7 per cent. increase. However, when we look in a little more detail, we see that the shire areas will receive 6·75 per cent., London will receive 7·84 per cent., but the metropolitan districts will receive 5·96 per cent. That is a lot lower than the average figure. Given the current level of inflation, if we compare the 1991–92 total budgets with those for 1992–93, the increase in SSAs falls to as low as 4·8 per cent. So the figure of 6·7 per cent. being bandied about by the Secretary of State is obviously wrong. The figure becomes even smaller if we consider balances and reserves that local authorities have to take into account.
Time and again my local authority has asked for changes to the SSA methodology. This year, there has

been a change in methodology—an extension to cover foreign visitors and a change in relation to interest receipts. Both those changes will have no effect on my constituency and my local authority. Extensions to cover foreign visitors will probably make the position worse. The special area protection grant will be reduced by £25 per adult. Again, because of the position of my local authority, that will probably make things worse.
The SSA for Barnsley for 1992–93 is £140·74 million— an increase of 4·6 per cent—not 6·7 or 7·2 per cent. but 4·6 per cent. That is 89 per cent. of the average increase for metropolitan districts. It equates to 68 per cent. of the national increase, to 65 per cent. of the average increase for shire counties and to 55 per cent. of the increase for Westminster council, which will receive double the standard spending assessment of my authority. Why is Barnsley metropolitan borough council required to provide the same level of service as all the other authorities but with half the resources? How can that be justified? It cannot.
My metropolitan district will rank 36th out of 36. Manchester's standard spending assessment is 78 per cent. greater than that of my authority. Why does Manchester need 78 per cent. more finance to provide a standard service? Why does my authority have to do it far more cheaply than Manchester? Why is there no capping criterion for the level of SSAs when, of the 36 authorities, the one at the bottom receives 78 per cent. less than the one at the top? The Government are quick to impose a cap on budgets and to restrict the level of the council tax in relation to the bottom and top levels, but, when it comes to the SSAs, the top authority is 78 per cent. ahead of my authority which languishes at the bottom. Why is there no cap on such an expenditure level?
If we consider previous settlements of the revenue support grant, we find that, from 1991–92, there has been an increase of about 13·4 per cent. There will be a decrease in the national non-domestic rates because the rateable base has fallen. However, all in all, when one considers the RSG and the business rates, my authority will receive a net increase of 1·6 per cent. taking into account external financing. My authority will receive not 6·7 or 7 per cent. but 1·6 per cent. Bearing in mind the Government's capping criteria that allows an increase of about 4·6 per cent. on the budget for 1991–92 and gives us a capping avoidance target of £147·7 million. That will leave us £5 million short of our budget requirements to maintain the level of expenditure of this year.
It has already been said that the teachers' pay settlement will be about 5 or 6 per cent. I do not intend to go into the details of the ideas that Barnsley will have to consider for cuts. We tried that before with the Secretary of State's predecessor who complained that there would be a procession of bleeding stumps. I know darned well that that Secretary of State will ignore any information I give about cuts.
If Barnsley's SSA had been increased by the national average, we would have £3 million more to spend. If our SSA had been increased by the same amount as that of Westminster, we would have a further £5·2 million and I would not be standing here making the same speech that I made just a year ago and the year before that.
It is inevitable that there will be budget reductions and that my constituents' poll tax bills will increase by more than the rate of inflation, and this at a time when we are being denied the  funding to which we are


entitled from the European Commission because the Government will not allow it to be additional to the 1·6 per cent. increase. The Government say that we cannot have it because of inflation and other factors, but it is additional to nothing.
Finally, I mention the South Yorkshire fire and civil defence authority. In 1992–93, its SSA will be about £28·6 million, against a budget cap of £30 million. To maintain the current level of service, it would need £31·8 million. It would need £33 million for a reinstatement budget. A current service level budget means training cuts, no use of the fire service college, equipment cuts and the fire authority being 28 posts below establishment. A reinstatement budget would allow it to train officers and to have an establishment closer to Home Office minimum levels.
Let us compare South Yorkshire's fire and civil defence authority's SSA to that of other areas. Greater Manchester has received a 10·2 per cent. increase, Merseyside a 7·4 per cent. increase, Tyne and Wear 11·5 per cent., London 8 per cent., the West Midlands 7·6 per cent. and South Yorkshire 4·5 per cent.—bottom of the list again. Only South Yorkshire's fire authority has an SSA lower than the capping limits. There will be a £2·4 million shortfall between the cap and the minimum standard of fire cover. Clearly, that will lead to a poorer level of fire service provision in my constituency and, as I have said, higher poll tax bills. I again ask the Government to get rid of this stupid SSA methodology.

Mr. James Pawsey: Hon. Members representing Warwickshire have argued consistently for more than 12 months that the standard spending assessment formula is flawed, and I shall give the House three examples.
First, there is no reduction in the percentage of the education SSA which refers to additional educational needs. I am advised that Warwickshire county council, if able to decide for itself, would certainly not distribute 20 per cent. of its schools budget on the basis of figures produced by the 1981 census.
Secondly, the use of the current SSA formula highlights a serious difference between the Home Office and the Department of the Environment on fire service spending. Despite representations made by Warwickshire county council, there are no changes being made to the formula, which results in a gap of about 25 per cent. between the permitted SSA and the standstill expenditure on the fire service.
The SSA which is produced by the Department of the Environment's computer apparently identifies Warwickshire as an overspender, but Her Majesty's inspector of fire services has serious doubts about the service's ability to meet the operational requirements laid down by the Home Office. Therefore, it seems likely that Warwickshire county council will be making two command apearances—first, before the Home Secretary for not spending enough to ensure an adequate quality of fire service and, secondly, before my right hon. Friend the Secretary of State for the Environment for overspending on its SSA.
The third flaw that I have identified is in anticipated revenue. In the equivalent debate last year I drew attention to the fact that there is an assumption made within the formula for the amount of anticipated revenue that the authority receives from interest on receipts. I freely admit that my right hon. and hon. Friends have made an adjustment which reduces the size of the anomaly, and I am grateful for that. However, despite that adjustment, the county does not receive the amount, and, indeed, cannot receive the amount, laid down by the SSA formula because Warwickshire county council's balances are much lower than the assumed figure. Low balances equal low revenue.
Hon. Members will be aware that counties are grouped by the Audit Commission into families. Warwickshire had the lowest revenue support grant per adult in its Audit Commission family for last year and this year. Let me illustrate that shortfall by again referring to the Audit Commission family. In 1992–93, top-of-the-pops Bedfordshire receives a massive £475 per head in revenue support grant. Bottom-of-the-league Warwickshire gets £286, a shortfall of almost £200 per head.
Earlier I referred to the discrepancy between the deemed interest and the interest actually received by the authority on its receipts. But we also have a problem with the area cost adjustment, which is known to local government buffs as the ACA. That point was made by my hon. Friend the Member for Nuneaton (Mr. Stevens), who is sitting in his customary place. I acknowledge once more his hard work in seeking to obtain a sensible level of revenue support grant.
The ACA directs more than £1 billion each year to the south-east, which is not so much a brain drain as a bullion drain. It is based on general data and applies to employees whose pay is, in the main, determined not by area but by national pay scales, which apply to the midlands and to the south alike. The practical results of the ACA show that county councils in the south have standard spending assessments £200 million more than the amount that they believed it appropriate to spend in 1991–92. In other words, the lucky and favoured south-east underspends when judged by SSA. If Warwickshire could join that favoured grouping, Warwickshire's problems would be over. If that is not acceptable to my right hon. and hon. Friends—and I understand why it may not be—may I point out to my hon. Friend the Minister that there is a second possibility, advanced by the Association of County Councils, which is to abolish the area cost adjustment.
There can be little justification for the ACA when £200 million is not spent. In a table giving the increase of this year's SSA compared with the figures for the last year of the old formula of general rate expenditure, Warwickshire is second from the bottom. I suggest to my hon. Friend that, by any criterion, Warwickshire and its charge payers are suffering pretty rough justice.
Like most hon. Members, I know that there is a pretty tenuous relationship between quantity of spending and quality of service provided. In education, for example, Newham spent the second largest amount per child, but came second from the bottom in terms of results. That can be contrasted with North Yorkshire, which was fourth in results, but 81st in terms of money spent per child. I remind my right hon. and hon. Friends that Warwickshire is not socialist Newham or Brent, which are run, or have been run in the past, by left-wing Labour councillors.


Warwickshire is run by sensible, responsible, Conservative councillors who genuinely do their best for their communities.

Mr. Tony Banks: Will the hon. Gentleman give way?

Mr. Pawsey: No, because I am limited to 10 minutes.
Last year, Warwickshire was capped, but thanks to the efforts of all Warwickshire Members and to the understanding of my right hon. Friend the Secretary of State and of my hon. Friend the Minister, the cap was lifted by almost £3 million. That made a most significant contribution which did much to prevent draconian cuts being made in Warwickshire services. This year, Warwickshire finds itself in a broadly similar position to last year's. I shall not therefore, be able to support the Government in the Lobby. The fact that for two years running I find myself opposing the proposals may give some food for thought.
I ask that should Warwickshire set a budget marginally and reasonably above SSA—and I made this point in an intervention in the speech by my hon. Friend the Member for Nuneaton—my right hon. Friend will show understanding and sympathy similar to that which he showed last year. He measured that sympathy not so much in words, but in money. Similar funding will this year protect the quality of service in Warwickshire. That plea comes from Warwickshire Members. I know that my right hon. Friend has done much to help and I, like other Warwickshire Members, am grateful for that help. However, I ask him, his hon. Friends and the Department of the Environment again to consider the SSA and to devise some method of producing an SSA which is fair not only to other counties but to Warwickshire.

Mr. Allen McKay: It is time that the House, the Government and the Secretary of State stopped denigrating local government. It is time that we acted like grown-up people and recognised local government for what it is and for what it does. It is time that we recognised the work, the time and the service of local councillors, and it is time that we recognised everything that has been and is done by local government. It does the House no credit wholly to denigrate local government.
I ask myself why local government is denigrated. I do not say that the Government have been allowed to carry out the principle that I am about to explain, but I must give some examples. Salazar of Portugal had to do two things to move power from local authorities to the centre: get rid of trade unions and get rid of local government. Franco in Spain had to do two things to move power o the centre: get rid of the trade unions and get rid of local government. Hitler in Germany had to do two things to move power to the centre: get rid of trade unions and denigrate local government. I do not wish to compare anything in my country with those examples, but I believe that the principle is the same. To move power to the centre, one has to make the trade unions impotent, and one starts gradually to move the power from local authorities to central Government.
Since 1979, the Government have pursued a vendetta against local government. Why? I have always said and always will say that it is central Government's duty to decide how much to give local authorities. After that, it is

local government's duty, in consultation with the citizens whom it represents, to decide how much it can go above that to provide proper services. In 1979, the Government set out to cut central Government grant to local government. They thought about all the power in the Labour authorities, which they despised, and they wanted people to turn against the local authorities. That did not work, so the Government gradually brought down the revenue support grant, which meant that the local authorities put up the rates to provide the same level of services—never mind an improvement in the services.
Central Government decided that they must do something else, so they dissolved the counties because they were providing bus services which were next to none. Everybody loved the bus services, but they were being subsidised and the Conservative Government did not like that. They got rid of the counties.
The Government considered what to do next, and that is how rate capping came about. The Government realised that, although they had caused the problem for local authorities of having to ask the people for extra money, people accepted that, so they put a cap on. That meant not only that local authorities could not get money, but that they could not provide services. The Government are looking for ways in which to draw attention away from their own centralised policies, so they ask people to make local government the whipping boy. That is where we start.
My local authority has more or less managed in that period, but the Government are treating local government like the proverbial donkey, whose owner decided, in the interests of economy, not to feed it. He was very disappointed when it died just when he had got it going without giving it anything to eat. That is what central Government are doing to local government: they are trying to make it manage without anything to eat and, if they are not careful, it will die.
Given all the sacrifices that local councillors have made, I do not know how they can take what is happening—all the brickbats that have been thrown at them both by those they represent and by central Government. I shall not go into the facts and figures, because my hon. Friend the Member for Barnsley, Central (Mr. Illsley) has already done so. Suffice it to say that, as a result of this year's SSA, my authority will lose £5 million. We need £150 million to break even, and there is no way that we can find that money. Not only will every poll tax payer in my area have to pay a lot more; they will get fewer services.
That money can only come from what hon. Members on both sides of the House have always recognised as the two largest spending areas—social services and education. In 1974, the authority decided to embark on a rolling programme to provide nursery education throughout its area. In 1979–80, that programme had to stop: the authority had to find the money to meet its statutory obligations, so non-statutory obligations had to go. As a result, half of those living in my constituency are saying, "Hey, wait a minute; you've provided nursery education for that half of the area, so why not for this half?" My concern is that the half of my constituency that does enjoy nursery provision may find it gradually eroded because, as a non-statutory duty of the authority, its funding may have to be reconsidered.
Those are some of the problems that local government faces. In addition, further responsibilities are being placed


on local government by central Government. Where is the funding to be found for child care, care in the community and extra education? 
If this Government or any future Government, of whatever political persuasion, do not get down to examining what has happened to local government over the past few years and attempt to put it right, the problems will remain. I honestly believe that the Secretary of State recognises the problem. The problem facing him, however, is how to extricate himself from his present difficulties and save face at the same time. The time for saving face has gone. It is time to co-operate to put local government back on the pedestal where it belongs, and for the Government along with local government and local people, to find funds once again to provide services that have been lost.
The local authorities provided employment. All the little construction firms that depended on local government contracts for their survival have died because of central Government's action. Local government also provided enterprise and industrial estates. Firms have come from Japan as a result of local government enterprise. I am the first to admit that they would not have come without central Government help and that we have received central Government grant for regeneration. Having provided that assistance, the Government should not kill the area.
As the Secretary of State is here, I want to make a plea about RECHAR. The Secretary of State smiles, but let him answer my question. The unified business rate will bring to my authority an increase not of 7 per cent. but of 1·6 per cent. The poll tax will bring to it an increase of 4·6 per cent., not 7·8 per cent. The police and the teachers are to receive an increase of about 10 per cent. Where will the money come from for that? All those items of expenditure will have to be looked after. If the Secretary of State can say that RECHAR will come in, under present Government rules, in addition to the 4·6 per cent. and the 1·6 per cent., I will start to believe him. If he cannot, I shall believe the others, who say that RECHAR money will be dissipated in a way that was not intended. It is time that the matter was looked at.

Mr. Andrew Mitchell: The hon. Member for Barnsley, West and Penistone (Mr. McKay) mentioned RECHAR. My right hon. Friend the Secretary of State knows that all of us on both sides of the House are determined that the money should be made available to the areas that we represent. My right hon. Friend and his colleagues know that I succeeded in persuading the British Government to include my constituency in the RECHAR proposal. It was with great dismay, therefore, that I learned that the Commission had removed my constituecy from the list of those seeking RECHAR help. In adition to seeking to secure RECHAR money, I hope that we shall ensure that it goes to those constituencies that need it. I place on record my dismay that the Community has removed my constituency from the proposal.
At the beginning of his speech, the hon. Member for Barnsley, West and Penistone said that he thought that the Government and the Secretary of State should stop knocking local government. It is pretty hard to sustain the

view that the present Secretary of State has knocked local government. He has consistently sought to bolster the pillars of local government and enhance its role.
It is important to recognise that there is a strongly held view that it is the Labour party that has undermined the local government establishment. That is why many of us welcomed the strong emphasis that my right hon. Friend the Secretary of State placed on the fact that there would be no amnesty for non-payers of the community charge. Like it or not, Labour Members must accept that it was the campaign by 30 or so of their number against payment that made it so much more difficult for local authorities to collect the money. The fact that non-payers have had the apparent sanction of members of the Labour party has made it that much more difficult for authorities to collect the sums.

Mr. Tony Banks: Is the hon. Gentleman really suggesting that non-payment is attributable entirely to the actions of a mere handful of Labour Members of Parliament who decided that they would not pay? If so, the hon. Gentleman is giving those hon. Members powers that none of them ever believed they had. Their rejoinder would be, "Oh, that we had."

Mr. Mitchell: That is not quite what I said. I am not saying that those hon. Members were pivotal. I am saying that the campaign for non-payment by 30 or so Labour Members sent a material message to the country. It is all very well for the hon. Gentleman to say that they were a mere handful; they made up more than 10 per cent. of the parliamentary Labour party. That is a large number, and they sent a clear message to the country.

Mr. Brandon-Bravo: Lest it should be thought that we are referring only to Labour Members of Parliament setting a bad example, will my hon. Friend confirm that, in our own county of Nottinghamshire, senior Labour members of county hall—the very people who were setting the charge—did not pay until they were the subject of court orders? That was the kind of example being set by Labour councillors throughout the country as well as by Labour Members.

Mr. Mitchell: My hon. Friend has eloquently demonstrated the truth of my remarks.
The position was even worse than that. The authorities which are determined to collect, which challenge the concept of non-payment by the use of the courts and which are successful in collecting are Conservative councils, whose record of collection is infinitely better than that of Labour councils. As my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) said, the Conservative councils in Nottinghamshire have been successful and determined in collecting the community charge. It is the Labour councils which levy the highest charges and which are the least successful in collecting.

Mr. Allen McKay: It is a pity that we do not have time to go into the way in which charges are made. The hon. Gentleman is doing himself a disservice both on that subject and by talking as he does about non-payment. He has not got down to the nitty-gritty of why non-payment has occurred. I should like to tell the hon. Gentleman about the people in my constituency who have had to pay the 20 per cent., but I hope that we have now got rid of that


rule. Others who have not paid the poll tax are those who cannot pay. They are counselled, and the payment comes late.
Then we come to the small core of those who will not pay, and the problem is getting those people into court. The police will not serve warrants. The police have received an increase in their allocation to pay for 17 civilians because the chief police officer does not believe that his officers should waste their time serving such warrants. The increase for the police this year will simply pay for civilians to serve warrants on those who will not pay the poll tax. It is ironic that that increase will be paid for by those who have paid their poll tax.

Mr. Mitchell: The hon. Gentleman is talking about the difficulties associated with collecting the community charge. Conservative Members would not disagree that it is difficult. However, like several of my hon. Friends, I am talking about something else—about the signals that the hon. Gentleman's colleagues have given the country about non-payment.
I turn now to the level of the settlement and to the way in which the spending assessments are determined. The settlement that has been obtained by the Department of the Environment this year seems fair and just, all in all. Of course each of us would like our own local authorities to have more money, but taking the constraints on Government into account, this seems a fair and defensible settlement.
On this as on other occasions, I have noted the points that have been made about the SSAs. When the new system was introduced, I looked hard at the SSA for my constituency of Gedling and at those for other local district councils in Nottinghamshire. I had to conclude that, by and large, the way in which the SSA was constructed was fair. I emphasise that I should like my right hon. Friend the Secretary of State to find more money for Gedling. We can and will spend well every penny that he provides for us.
Having considered Broxtowe, Rushcliffe, the city of Nottingham and neighbouring borough councils, I recognise that, broadly speaking, the settlement is fair. I wonder how easy it would be to start uprooting the system again. It is clear that there is logic and sense in the way in which the SSAs have been calculated around the country. I am sure that my right hon. Friend does not need me to tell him that it could be dangerous and difficult to uproot the system at this point.
It is immensely frustrating that, although local government receives funding through its own community charge precepts and from central Government allocation and grant, it for ever complains about and lays at the feet of the Government any shortfall between what it would like to do and what it can deliver because of cost constraints.
Local government must face up to the fact that it has its own revenue-raising powers and grant from central Government, from which it must meet the needs that it seeks to meet and was elected to meet. It must justify its allocation and its spending priorities.
Schools in my constituency badly need capital spending. I am relatively happy that the Government have massively increased the amount of money available for capital spending on schools this year in Nottingham, but I now look to the county council to live up to its responsibilities and to spend on those schools the amount

that is required by the children who are educated in them. Some county councils continually shuffle off responsibility for their decisions and difficulties on to central Government, but in doing so they undermine local government.
We have heard today the litany that we hear in all local government debates—that the bad decisions that have been made by local government have come almost entirely from councils that are controlled by the Opposition parties. I say "parties" because I am referring also to the Liberal Democrat party which, sadly, is not at the moment represented in the Chamber. Hansard is littered with such examples and, in a positively brilliant speech, my hon. Friend the Member for Harrow, West (Mr. Hughes) listed many of them.
All our local government debates have contained examples of Labour's spending in Hackney, Lambeth and Liverpool and around the country. My hon. Friends and I are driven to the irresistible conclusion that, if that is what the Labour party is like when it is in power, we have many lessons to learn about what it would be like if it were ever to form the Government at Westminster.
The hon. Member for Barnsley, West and Penistone (Mr. McKay) has said that the Government have undermined local government but, quite apart from what I said earlier about non-payment, I put it to him that the extraordinary behaviour of some of those bizarre councils has done more to undermine local government and the respect in which central Government and local people hold local government—

Mr. Allen McKay: Again, the hon. Gentleman is wrong. His attitude to local government is set, narrow and shallow. If he thinks that the conduct of one local authority affects other local government thinking, he is wrong. Local government is an entity on its own. Its affairs never spill over its own border. That has been one of the problems of local government, not what the hon. Gentleman has referred to.

Mr. Mitchell: With respect, I do not agree with the hon. Gentleman. The chapter of the way in which some Labour councils have behaved is well documented. That is what has done so much damage to local government.
My final point relates to the important work of the Audit Commission. All hon. Members are consumed by analysing how much money has been spent and whether more money will be made available for particular services, but we do not spend anything like enough time considering whether that money is well spent. I pay tribute to the work of the Audit Commission. It has saved billions of pounds by writing reports that are always respected and independent, and which suggest ways in which local government—and, now, the health service—can get better value for money.
The Audit Commission has examined achieving value for money in areas such as the management of the council housing stock, and has produced reports on absenteeism through sickness, on the police, on refuse collection and on schools. It has performed an outstanding service to local government and to local and national taxpayers by seeking to get more from each pound that is spent in public service. Although the citizens charter and the charter mark are an excellent extension of the other reforms that we have introduced to make local government more efficient and


responsive to the people it represents, the work and commitment of the Audit Commission are our best guarantee that that money will be well spent.
I very much regret that it appears that the Labour party's plans for the Audit Commission may water down its effectiveness by handing control to the Labour party's chums in the unions and local government. If the Audit Commission is to continue to do the work that it does so successfully for local government, and to achieve better value for money, it must be independent and impartial, and its reports and work must be respected. I very much hope that the work of the commission can be significantly extended after the general election. It could do much more work on housing associations and housing management. We must ensure that we can further benefit from the work that it performs so well.

Mr. Tony Banks: The feelings of the young hon. Member for Gedling (Mr. Mitchell) about the way in which local government has broken up were expressed subjectively and I suspect that he will not agree with me when I say that they seemed to date from about 1979—and we know what happened in 1979 when the hon. Member for Finchley (Mrs. Thatcher) was first elected. She was elected, in part, on a manifesto which said that it was her intention to take Whitehall off the backs of the town halls. That was her claim, but what followed was a complete lie in terms of the manifesto pledge.
The relationship between central and local government has deteriorated partly because a series of Conservative Administrations have continually attacked and deprived the local authorities of resources, and subsequently because of the poll tax.

Mr. Brandon-Bravo: rose—

Mr. Banks: I shall warm to my theme and then give way to the hon. Gentleman.
When the hon. Member for Gedling mentioned the Secretary of State being a great supporter of the pillars of local government, I could not avoid a little chuckle. That reference immediately brought to mind Samson, who pulled the pillars down. The Secretary of State has indeed pulled those pillars down. I then went on to think about who had clipped Secretary of State Samson's golden locks and, once again, I realised that it was the right hon. Member for Finchley. However, he is still with us, and his contribution from the Dispatch Box was in his usual style, as if this House was not made up of Members of Parliament, but delegates, all with their blue rinses and red necks, applauding to the rafters when he makes one of his roustabout speeches to the Conservative party conference.

Mr. Brandon-Bravo: The hon. Gentleman is right that there was a change in 1979, but for different reasons from those he advanced. However, I do not believe that I will be able to disabuse him of his beliefs.
Prior to 1979, most local authorities were Conservative-controlled and they considered themselves to be local authorities, not Governments. When the Labour Government asked those of us in local government to exercise restraint on spending, we did it because they were the Government, and we were the local authority. After 1979 there was a marked increase in Labour-controlled

local authorities and that understanding went out of the window. Consensus went out of the window, and those authorities decided locally that they were the Government and to hell with what was said in this place. That is why the Conservative party had to legislate to get done those things which were done by agreement prior to 1979.

Mr. Banks: I should like to consider that argument in some detail, but time does not permit it. However, I cannot let the hon. Gentleman get away with it altogether.
Everyone in local government would accept that central Government set the broad parameters for overall spending, which is perfectly legitimate. The hon. Gentleman spoke about a Labour Government asking for cuts to be made. It is important to remember that, then, central Government gave a rate support grant equivalent to about 60 per cent. of all local government spending. We are now talking about a rate support grant of about 42 per cent.—considerably lower. When the Labour Government called for cuts, local government spent a great deal more. The hon. Gentleman has not made his case.
The interference in local government by central Government is not just financial, but political. However, we should interfere in local government with some trepidation because local democracy and local accountability underpin parliamentary democracy and accountability. Many hon. Members on both sides of the House have cut their political teeth in local government and one would expect such Conservative Members to show more loyalty towards it.
I accept that one can make some criticisms about Labour local authorities, but what I dislike about the Secretary of State's usual contribution is that it is so clichéd, simplistic and grotesque. He seems to say that Tory councils equal good, Labour councils equal bad. That does not bear any analysis. If one seeks to understand the way in which politics is gradually dragged into the gutter, it is because hon. Members come out with such a simplistic approach. [Interruption.] The hon. Member for Southampton, Test (Mr. Hill) has only just ambled into the Chamber. If he would like to sit there for a while and learn something, I will then cheerfully give way to him.

Mr. James Hill: rose—

Mr. Banks: I do not normally give way to someone who has just ambled into the Chamber, but I shall make an exception on this occasion, because I rather like the hon. Gentleman's florid looks.

Mr. Hill: The hon. Gentleman cannot separate his several lives. He is unable to separate his contribution to what should be a well-informed debate from a satellite television knockabout. If the hon. Gentleman is as clever about local government as he is trying to impress us, perhaps we could hear something about local government. We know that he was a member of the Greater London council, and there are plenty of things that he could talk about. However, he is just offering us a knockabout contribution, and I do not believe that that will get the debate any further.

Mr. Banks: I am glad that I did not miss that intervention, because it has contributed so much to the debate. The hon. Gentleman, who has only just wandered in, should realise that I am responding to points raised earlier by his hon. Friends. Although he may not agree with what I have said, and what I am about to say, he


should at least extend to all of us the courtesy of sitting quietly in his seat, especially if he joins us at such a late time.
There are times when I do not believe that the Secretary of State understands what is happening in local government. I know that the right hon. Gentleman gets around the country, but does he realise that it is almost impossible to maintain services in many of our local authorities? I have never known a time when central Government have interfered so much in the day-to-day running of the town halls. We should allow them to get on with their business and we should not interfere so regularly in what they do.
My hon. Friends the Members for Newham, South (Mr. Spearing) and for Newham, North-East (Mr. Leighton) have already mentioned the particular problems that we face in our borough. We are the second most deprived local authority area in the country according to the Department of the Environment's own indices. We have a raft of problems with which to deal and the Secretary of State should understand some of them by now.
The particular problem to which my hon. Friends have referred has arisen because we will have to pay back about £6 million, which was awarded by the rates valuation courts because of previous overpayment of rates. As my hon. Friends have said, the original calculations were made by the Inland Revenue and had nothing to do with the borough of Newham. We had a stable rate base for a long time and we saw no reason to doubt that there was anything untoward in the ratings that had been made within our borough. We now find ourselves confronting a massive pay-back.
I do not intend to say any more about this issue, which has already been referred to by my hon. Friends. However, we were received promptly and courteously by the Minister for Local Government and Inner Cities yesterday when we explained the situation to him. I would not want to pre-empt any joyous, or even hopeful, news that he might tell us tonight. I would even say something nice about his new-fangled haircut if he were to say something hopeful to the London borough of Newham.
It is important to consider the wider implications of the revenue support grant settlement as it applies to all London. It appears that London is well represented tonight, but we are all from one particular borough. As chair of the London group of Labour Members of Parliament, I should like to consider the difficulties being experienced by other London boroughs.
It is the opinion of the Association of London Authorities that the level of revenue support grant does not reflect the wide diversity of problems that are faced by ALA Labour boroughs. Considerable evidence has been collected about the additional costs arising from refugees. It is known that more than 80 per cent. of refugees admitted to this country make their way to London, for many good reasons. However, the Government have effectively wiped their hands of any responsibility and have left London boroughs, essentially Labour ones such as Haringey, Newham and Islington—I accept that there are also refugees in Kensington and Chelsea—with the responsibility for those refugees and all the problems that they bring with them. Camden has calculated that the additional spending required on unaccompanied refugee children in 1992–93 will be just short of £1 million. Similar figures apply to other ALA member authorities.
London is also experiencing a great problem with homelessness. Any hon. Member who wants to go round with his eyes open will become aware of that problem quickly. An analysis conducted by the London Housing Unit has suggested that, by March 1992, and on present trends, nearly 50,000 households in London could be in temporary accommodation. The net cost of providing such temporary accommodation will be about £265 million. There is no adequate recognition of such costs in the revenue support settlement.
The Secretary of State really must address the unique problems of London. I realise that many of my hon. Friends do not have much sympathy with Members who say that, but they at least work in London and appreciate that the capital city has a series of unique problems. We do not want an unfair share of what is being handed out by the Government; we want a share that reflects the peculiar circumstances in the capital city. The changes in standard spending assessment methodology have upset a number of Labour councillors. That methodology is not fully understood. Indeed, I suppose that very few people understand it.
I want to put to the Minister of State a question about foreign visitor nights. The Association of Local Authorities is simply opposed to the inclusion of foreign visitor nights in the measure of enhanced population in respect of SSAs for other services. The rationale of using visitor nights, rather than where visitors spend their time during the day, is very questionable. Secondly, the data source is completely inadequate, being based on 1981 census data. Thirdly, the financial effect of the inclusion of foreign visitor nights is totally unfair.
I do not want to point an accusing finger at the Secretary of State. Actually, I do point an accusing finger at the Secretary of State, but not at the Minister of State, who is a decent, honourable person. I hope that, when he winds up the debate, he will say something nice about Newham. [Interruption.] If the Minister, having induced me to say something nice about him, betrays me at the Dispatch Box I shall take horrible revenge. However, that will come at a later debate.
When one looks at the inclusion of foreign visitor nights, one sees that Westminster, which has a Conservative authority, gains £5·3 million and that Tory Kensington and Chelsea gains £4·5 million, but that Labour Hackney loses £600,000, Islington loses £700,000, and Newham loses £700,000. One wants to know a little more about this question of overseas visitors.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): Camden?

Mr. Banks: Perhaps Camden, too, has gained—I hope so—but I shall want to know whether it has gained as much as Westminster and Kensington and Chelsea.
Then there is the matter of the Inner London education authority transitional grant. ILEA is concerned about the rapid rate of withdrawal of that grant. The reduction for 1992–93 represents more than 28 per cent. in cash terms, or one third in real terms. The authority believes that the profile of the grant should be reconsidered and that the grant for 1992–93 should be increased by at least £60 million to prevent further deterioration in education in inner London. I hope that the Minister will address that problem.
I come now to the elements of spending that the ALA says should be disregarded for capping purposes. Again, I put a perfectly reasonable question to the Minister. Why should not all expenditure on council tax preparation, which is not met by specific grant, be excluded? The poll tax will be very difficult to collect in 1992–93, as every hon. Member acknowledges. Many authorities face a stark choice between allocating resources to poll tax collection and enforcement and allocating resources to front-line services such as education and social services. Poll tax administration costs must be placed outside the capping level.
That seems to be a perfectly reasonable proposition. The hon. Member for Gedling referred to Members of Parliament and councillors who are not paying their poll tax. Everyone has a civic right—a civic duty, some would argue—to refuse to pay a tax that they think is peculiarly unfair. Those people must take the consequences, of course, and for many of them the consequences are dire. My hon. Friend the Member for Liverpool, Broadgreen (Mr. Fields)—perhaps I cannot now refer to him and others as my hon. Friends, as they are no longer in the party—

Mr. Andrew Mitchell: They have been sacked.

Mr. Banks: Exactly. They have been sacked from the Labour party, and I expect that they will have to leave Parliament. They have paid a very high price for taking their stand. I disagree with them, as, no doubt, do most other hon. Members. However, the hon. Member for Gedling should never disparage a person who puts his job and his reputation on the line when he sees a tax or a law as grotesquely unfair. We all know that the poll tax was grotesquely unfair. That is why the Conservative Government got rid of it.

Mr. Mitchell: The hon. Gentleman makes a point about the civic duty of citizens. He should accept that there is a very different point to be made in respect of a Member of Parliament. Members of Parliament, having taken part in the process of making laws, cannot then break them. Two of the hon. Gentleman's hon. Friends may have forfeited their seats in this House. What about the other 28, who still have the sanction of the Labour party?

Mr. Banks: I have made the point that I do not agree with the stand that has been taken. I am merely trying to emphasise that those people have paid a very high price. In those circumstances, hon. Members should not be so critical of them. Indeed, the price that has been paid is one which I suspect very few other hon. Members, on either side, would be prepared to pay for a principle. That ought to be recognised.
There is much about the rest of the situation in London that I should like to comment on, but I see that many hon. Members are eager to speak, and there is no audience so unreceptive as a bunch of people waiting for someone else to sit down so that they can get up.
I have great affection for local authorities. I cut my political teeth in a local authority; I went to a local authority school; I lived in a local authority house; and I learned music in a local authority concert hall. In those circumstances I have great reverence for local authorities, which are grotesquely attacked by Conservative Members.
We want to see local authority services in this country improved, but that will not be achieved by hon. Members who constantly attack and denigrate decent officers and councillors who give up their time, their jobs and all sorts of other things. Those people want to provide services, and we should make sure that they are able to do so. However, I am afraid that they will all have to wait for the election of a Labour Government before local democracy can be put back on the road.

Mr. James Paice: Like the hon. Member for Newham, North-West (Mr. Banks), many Conservative Members cut their political teeth in local government. I should hate anybody to get the impression that affection for local government is the preserve of the Opposition. It is not. Many Conservative Members have spent many years in local government. One of our advantages is that we were in local government at a time when there was a Labour Government and recall how things were in those days. That is something to which I shall return in a moment.
I want to associate myself very closely with the comments of my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) about the settlement for Cambridgeshire. There was some concern that Cambridgeshire, as a very fast-growing county, would not receive the SSA that it felt it needed. Needless to say, it still has not received what it feels is needed, but that is beside the point, as it never will. The SSA that the Government has awarded to Cambridgeshire under the formula is substantially higher than those of many other areas, and we believe that the county has been treated extremely well.
The Minister of State will recall that my colleagues and I met him to discuss the situation in Cambridgeshire, as did hon. Members from other counties. The points that were put to the Minister have already been enumerated, so I shall not repeat them. I should like, however, to make a brief comment on the additional area cost adjustment. It is nonsense that, on one hand, the civil service recognises the extra costs of living and working in Cambridgeshire by awarding premiums, whereas the Department of the Environment does not recognise those costs when it comes to settling grants. I very much welcome the changes in the recognition of notional interest from capital receipts. That important point was made by Cambridgeshire, and the Government have recognised and acted upon it. In the end, we have had a very good settlement.
Concern will always arise from what is known as data lag. In any fast-growing county such as Cambridgeshire, data lag is bound to be of some significance, although not as much so as some of my Cambridgeshire colleagues believe. Inevitably, any population statistics will become out of date in a growing county.
When considering that problem, one comes to the fundamental fact that any formula to distribute a central grant is bound to create problems. For one to gain from an adjustment of the formula means others losing. So, in the Government's efforts to ensure that any changes to the formula meet with the general approval of the local authority associations—a worthy desire—any change which means that the majority might lose will be


vigorously opposed. Hence, any measure which tries to overcome the data lag means that those who represent areas with falling populations will oppose it.
Almost all areas in which there have been population reductions in recent years have been urban areas, often or usually represented by Labour authorities. So my constituents are still losing because urban local authorities are gaining more grant than they would be getting if the population statistics were right up to date. It will be difficult to overcome that problem. Perhaps, as a Lambeth poll tax payer, I should welcome the fact that Lambeth is getting a bit more grant than it would have got if the population statistics were absolutely up to date, but I would rather sympathise with my constituents, who to some extent still lose from the system.
That problem is not unique to SSAs: it applies to any formula used to distribute any sort of central grant. There will always be authorities which take the view that they are being ill treated by whatever formula or system is adopted, and that is exacerbated the higher the level of central grant as a proportion of total expenditure. So Labour Members who pretend that they could increase the grant—suggesting that somehow the problem would go away—are fooling themselves and the public.
I look forward to the day when education ceases to be a local authority function. I should like every school in Britain to be grant-maintained, given total responsibility for managing its own affairs. If one took away, say, 70 per cent. of expenditure, one would be left with a remnant of local authority expenditure, which would mean that the impact of whatever national formula was used for the central distribution of grant would be rapidly and considerably diminished. That would get over the annual event in which we are participating today and in which many of us—I am as guilty as any—fight our corners because of the way in which the formula has worked.
I referred to some of us cutting our teeth in local government in the 1970s. I remember, even in those days, the right hon. Member for Bethnal Green and Stepney (Mr. Shore), when Secretary of State, exhorting local authorities to curtail their expenditure. I recall the glorious mess that the Government of the day made in the 1970s. If they understood, even then, that we must curtail local government expenditure—that it could not just be let rip—goodness knows what the Labour party today is thinking if it believes, as it appears to believe, that we can get rid of capping, increase government grant and allow local authorities full vent to all their ambitions for expenditure.
Understandably, the hon. Member for Dagenham (Mr. Gould) declined to answer an intervention of mine when he had clearly said, in answer to an earlier intervention, that a Labour Government would abolish the community charge forthwith. The implication was that it would be abolished during the next financial year, before its demise, already decided, on 31 March 1993. If that would be his intention, he must say how local government would be funded in the remaining 10, 11 or however many months remained of the following municipal year.
That would involve another £6 billion to £8 billion having to be paid by way of public expenditure, perhaps out of borrowing. That would be paid for not by us but by our children and their children paying back, as always, the debts incurred by Labour Governments. One might describe it as a case of the mice playing while the cat is

away, in that the shadow Treasury team is not in the country just now, able to keep an eye on promises being made on behalf of the Labour party.
I largely welcome the settlement. I recognise the limitations of SSAs. The problems involved are not unique to the SSA system. They will be with us whatever mechanism is used to distribute the money that the Government of the day decide is appropriate for local authorities to have from the centre. We cannot get round that feature of the system, but the sooner the totality of local government expenditure is reduced dramatically by taking education out of it, the sooner the effect of problems in the formula will be diminished. I shall support the Government in the Lobby tonight.

Mr. Harry Barnes: The standard spending assessment is one of two great evils of the poll tax. The first was the poll tax itself, based on a flat rate, the worst form of taxation ever introduced in a democratic society. It has not been fully removed but merely sidestepped with the introduction of the council tax.
The second evil was the method used for arriving at the standard spending assessment, meaning that in many cases the poll tax was pushed up to very high levels. That SSA remains in place as part of the council tax. So we still have with us one of the major problems that the poll tax introduced.
Much has been said about the methodology that has been used in constructing the SSA. That methodology affects no district council worse than that of North-East Derbyshire, which covers much of the constituency that I represent. Other authorities in Derbyshire are also badly affected by the operation of the SSA, as is Derbyshire county council.
It is often said that when league tables are produced somebody must finish at the bottom. North-East Derbyshire, with its areas of serious unemployment and former mining areas that are now in decline—places such as Clay Cross, which at one stage had quite a reputation in the House, Renishaw and Holmewood—has great problems requiring various types of assistance. Those areas come within North-East Derbyshire, which manages to finish in 365th position out of 366 district councils in England, with only east Dorset below it from the point of view of SSA per head of poll tax payers.
I have just received a written answer from the Department of the Environment listing the statistics; it will be in the Library. It shows North-East Derbyshire's SSA as £81 per head, with many authorities above it receiving two or three times more because of the problems in their areas. That is a vast and almost unbelievable disparity for an area such as North-East Derbyshire. An examination of the breakdown of the figures leading to the area's SSA reveals many of the difficulties.
There is another table in the Library in another answer from the Department of the Environment. It is about the distribution of the SSA: the percentage that is expected to be collected through poll tax, the percentage that comes from the business rate and the percentage that comes from the revenue support grant. Again, North-East Derbyshire is near the bottom of that league in terms of revenue support grant, but high up in terms of the amount that has to be raised in poll tax moneys in order to meet that SSA.
It is 13th from the top, or 13th from the bottom, whichever way one wishes to look at the list. This means that, when the two sets of figures are related, the SSA for the poll tax payers in North-East Derbyshire in terms of the grant that they receive is abysmal.
The Audit Commission has produced sets of comparative statistics for similar types of authority. North-East Derbyshire finishes at the bottom of those lists, as it finishes bottom of the lists for all the authorities in Derbyshire, although those other authorities are themselves often badly placed. This is the position for a district authority because of the four main items used in assessing the SSA. There is the enhanced population. North-East Derbyshire loses in this connection because many people move into Sheffield or Chesterfield, or for the pits to places such as Markham, for their employment and are not there during the day. That has a knock-on effect, because that figure is then used and is multiplied into other figures which are used later. A considerable loss occurs there, because the moneys that North-East Derbyshire had to provide in no way relate to the loss of those amounts. I could go through those items one by one and there are very few that have amounts associated with them that could be said to be of relevance. They are often matters of relevance to county councils but not to district authorities.
Then there are the characteristics of ward density and ward sparsity. When those two figures are added together, North-East Derbyshire manages to finish up with a smaller grant than any other authority.
The shape of North-East Derbyshire has to be looked at, along with the services that it has to provide. It defies logic that it is seen to be an ideally shaped area, the best type of make-up that could possibly be found, therefore requiring the lowest possible SSA.
In terms of the all-age social index, North-East Derbyshire falls down because it has a social mix whereby the eastern part of the district is very much a traditional working-class area and the western part is a middle-class area. That middle-class element reduces considerably the grant that is available. It is as if working-class people have to carry middle-class people on their backs.
There are other problems for North-East Derbyshire, and these have been stressed by other hon. Members. There is the problem of the RECHAR money which is not being provided. The pit closure programme continues and workshops are now to close, which affects the level of the business rate.
All this takes place in the context of Derbyshire itself. If its figures are compared, those of the last GRE with its current SSA, Derbyshire finishes at the bottom of increases for the shire counties. Yet it also has characteristics which mean that these policies should not be directed towards it. I am saying, not that a fiddle has taken place after the methodology has been established, but that the methodology produces this sort of nonsense and should be replaced.
The fraud squad has visited the council offices in North-East Derbyshire. Instead, the fraud squad should be investigating what has been done in local government finance. An ordinary, decent authority is attempting to manage on wholly inadequate resources, and if it goes only slightly beyond the SSA, it moves into the capping area. That is an unbelievable situation for the people of

North-East Derbyshire. The position is similar in areas such as Chesterfield. Conservative Members such as the hon. Member for Gedling (Mr. Mitchell) will find that their authorities are also placed in a low position. They should be pressing for higher funding and for the alteration of the formula rather than seeking to defend what is taking place.

Mr. Martin M. Brandon-Bravo: None of us tries to argue that the standard spending assessment is a perfect system, but, having lived through the old rate support grant mechanism, I do not believe that there is some magic formula, given the diversity throughout the country, that will meet with universal acclaim. I believe that the SSA is a legitimate and reasonable stab at establishing what each local authority needs, or needs to spend.
The hon. Member for Dagenham (Mr. Gould), in his opening remarks, specifically targeted his comments on shire districts. Believe it or not, the city of Nottingham is only a shire district, although I hope that that will not obtain for long after the next general election. Its adult population is just under 200,000 and its total population around 270,000—so it is hardly a shire district in that sense.
In debates of this kind, Opposition Members only ever mention the amount of money districts such as the city of Nottingham get under the grant that flows from SSA or under the old rate support grant. This year the Government have given, I believe, just under £6 million direct targeted grant because we have inner-city problems. I was delighted that the city of Nottingham was successful in the city challenge. That is another £37 million over a five-year period. Those grants are in addition to the grants that arise as a result of the normal annual announcement about standard spending assessments. As they all form part of a local authority's income, which it is entitled to spend, it is wrong that those factors are ignored when we debate local government finance.
I am dismayed by the attitude of the Labour-controlled Nottinghamshire county council which, having supported the city council in its first successful bid for city grants, has now decided not to support the city council's bid for the second tranche. As the population of the city of Nottingham is almost 30 per cent. of the county's population, my colleagues and I cannot wait for the present Secretary of State to introduce, after the general election, the necessary mechanism to give us our independence once again.
My county is almost identical to other shires in that just 13 per cent. of its total net expenditure is handled by the districts and 87 per cent. is handled by the county council. In cash terms, that total represents expenditure of some £750 million, only £96 million of which is spent by the districts. Given that so much money is spent, I can understand why my constituents constantly ask where on earth it all goes. That is another reason why I wish the Bill that is currently in Committee speedy progress. It will give us the mechanism for doing away with our county council, which is the wrong structure for local government in my area.
Because local people pay such a tiny percentage of the total amount spent, there is a gearing effect if a local authority spends more than its SSA. If, for example, it


spends £114 or £115 instead of £100, the charge that people will receive through letter boxes will almost double. That is a real worry. The Government are absolutely right to recognise that gearing effect and to build into the legislation a protection for the people who must pay the local bills. They are right to limit spending through their capping proposals. It is significant that, in the face of all the evidence of the adverse effect on people who cannot afford to pay extraordinarily high bills, both the Labour party and the Liberal Democrats oppose any limit on spending. Indeed, the hon. Member for Dagenham said that he can conceive of no circumstances in which the House would limit local government spending.
Another problem that worries me is local businesses, particularly small businesses. From the available figures, there is no doubt that, in my county, businesses pay 35 per cent. of the total bill through the unified business rate which, with all its faults, at least protects our local businesses from the predations of what would otherwise be an insatiable, spending Labour authority. Nationally at least, businesses have benefited from some £2 billion as a result of changing from the old system to the current one. The Labour party now says that it wants local businesses to pay a greater share of the total bill. Businesses large and small pay enough and they should beware of an incoming Labour Government—heaven forbid—because the hon. Member for Dagenham has said unequivocally that they will pay a higher ratio. That would be a disaster for all my constituents.

Mr. Peter Kilfoyle: I shall be brief, because I am aware of the time limit, and parochial because I was taken by some of the comments made by Conservative Members, who dragged up the hoary old myths about Liverpool. I understand that many Conservative Members are ignorant of the history of local government finance in Liverpool. I certainly understand the attitude of the hon. Member for Lancashire, West (Mr. Hind). He reminds me of a child going down a country lane, whistling in the dark and looking for the bogeyman. The bogeyman who is coming is the electorate, because they will tumble the Conservative party.
The history of local government finance in Liverpool is simple. When the Government changed the formula for the rate support grant in 1979–80, the rate was artificially depressed thanks to a combination of opportunistic Liberals and equally opportunistic Tories on the local council who, for electoral purposes, kept the rate down.
The objective authorities agree that Liverpool was deprived of hundreds of millions of pounds in rate support grant. The words of Professor Michael Parkinson of Liverpool university are my evidence for that. Nevertheless, the unseemly local political problem of the mid-1980s occurred because of the obduracy of the then Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), and the equal obduracy of Militant Tendency in Liverpool, which meant that the whole city was plagued with financial hardship that we feel to this day.
I am sorry that the Secretary of State is not here, because at one time he was the Minister for Merseyside. I am told that he had a soft spot for Merseyside, but I have never heard him criticise Ministers in his Department who have abused Merseyside recently and who have maligned the good city of Liverpool.
While the authority in Liverpool has no time for the poll tax, it has struggled to stay within the law. At every stage, it has had to struggle to carry out its responsibilities, for several reasons. First, it has respect for the law if not for the actual poll tax legislation. Secondly, the authority did not intend to fall into the trap of being used as Tory propaganda and as an example of what a Labour council would do with laws that it did not like. Thirdly, the authority has a commitment to local people and local services, and it intends to defend their interests within the law.
All through the late 1980s and into the 1990s, the leaders of the council suffered tremendously—personally, politically and financially—because they upheld the law. They were attacked, physically on occasion, and maligned by people in the city with ulterior political motives and by Ministers for electoral purposes. Nevertheless, they have stayed within the law, and the authority has never been capped.
Today I got the city treasurer's report faxed to me. What does it all mean for Liverpool? In 1992–93, there will be a grand total of £16·9 million in cuts in jobs and in services. As services deteriorate, those who suffer will be the old people, the children and those least able to protect themselves—the poor, the unemployed and single parents.
I should like members of the Government to come with me to Arnot street school in my constituency, where there are two schools in one building. I have seen coping stones blown down on the floor. The money to repair the schools is not there. The council does everything it can to stay within the law and provide decent services. All it gets for its pains is abuse from the Government. Of course, the district auditor does not view the council in the same way. He sees it as a model of probity in running a public authority. Again, there is not a word from the ex-Minister for Merseyside to say, "Well done," to Liverpool city council.
Tory Members think that they can use Liverpool for their own electoral purposes, but let me remind them that, in 1979, Labour did not control Wirral council or Sefton council. There were far more Tory councillors on Liverpool council then than the miserable two Tories now. The experience of those years has been an education.
Liverpool put its house in order. It does not believe the lies and propaganda being put out by the Tory party from a position of advantage in government. Mark my words: that will show in seats in the general election in Merseyside and across the north-west. The moral is that Labour councils look after the people and that a Labour Government will look after Labour councils.

Mr. Gerald Howarth: In Staffordshire, the council has had an increase in SSA over the last two years of no less than 25·5 per cent. By any stretch of the imagination, that is a significant increase. It comes at a time of economic difficulty throughout the country, when most businesses and households would be delighted to have had such a large increase in their income over a similar period.
Despite that massive increase in SSA to £625 million, Staffordshire claims that it cannot make ends meet. It claims that it is being treated less favourably than other counties, so the speech of the hon. Member for Derbyshire, North-East (Mr. Barnes) will be helpful to me


because I can show it to the county council to let it see that it is not the worst off in the country. At £808 per adult, the SSA takes Staffordshire well ahead of Sussex, Surrey. Avon and many other counties in the south of England.
Members of Parliament in Staffordshire have always sought to make the case for Staffordshire to the Government when the case is good. Notwithstanding the fact that the county council is Labour-controlled, Conservative Members of Parliament have always been prepared to join in to support a good case.
However, with regard to the allocation of budgets, local democracy is alive and at work. When deciding on their budgets, local authorities—whatever the constraints imposed on them by external factors—must decide where their priorities lie. Staffordshire county council has deliberately chosen to make a saving of £7 million in the education budget so as to inflict the maximum pain on my constituents and those of the hon. Member for Stoke-on-Trent, North (Ms. Walley), who I see is in her place.
The council claims that it needs a massive 10 per cent. increase in the education budget to provide the services, when we know that inflation is about 4·5 per cent. Even if one takes the highest inflation factor—teachers' pay—we are only talking about 6·5 per cent.
Like the hon. Lady, I have a child in a Staffordshire school, and my family are affected as a household. The parents in my constituency are up in arms at the decision of Staffordshire council deliberately to inflict damage on their children.

Ms. Walley: Will the hon. Gentleman give way?

Mr. Howarth: No, I only have a couple of minutes—I was granted less time than the hon. Lady.
The cuts have not been in education spending, but reductions in the increase that the county council would like to spend. But parents do not care who is to blame; they want quality education for their children. I understand that, but when the county council chooses to increase its social services budget by 20 per cent. in cash terms, it deliberately chooses to increase social services expenditure at the expense of our children's education, which is wrong.

Ms. Walley: Will the hon. Gentleman give way?

Mr. Howarth: No, I am sorry.
Staffordshire council has £20 million in its reserves and could use some of that money. It could make hard decisions about social services budgets. My hon. Friend the Minister of State has to make hard decisions, as do county councils, district councils, businesses and families up and down the country.
It may be that, thanks to local mangement of schools, some schools may have funds within their own budgets. However, it would be wrong were a county council to raid savings that a school had made through efficient management brought about by this Government. It would be wrong to penalise a school for being efficient.
I hope that I have been able to show my hon. Friend the Minister the deep sense of anger felt by parents in my constituency and myself as a parent of a child in a

Staffordshire school at what the council is doing. It has failed to make a case to Members of Parliament to show why it should be given special treatment.
We have heard throughout today's debate from various hon. Members that some parts of the country should be given special treatment. If all those demands were to be met, my right hon. Friend the Chancellor of the Exchequer would have to come to the Dispatch Box to announce a massive increase in taxation.
I hope that my hon. Friend the Minister will be able to add to the points that I have made about the treatment that Staffordshire county council has received from central Government.

Mr. David Blunkett: The ill news is that the cup game between Sheffield Wednesday and Middlesbrough is currently drawn. If anyone can bring me better news, it will cheer my spirits and lift my speech.
Today's debate has very much been a mirror of the one that we had exactly a year ago on revenue support grant and standard spending assessments, even down to the oldest of all tricks—Conservative Members rightly stating that their districts have specific problems or needs and recognising that there are hard decisions to be taken by a hard Minister who positively enjoys being hard. Most people wring their hands in despair while saying no.
Conservative Members say—as they have repeated this afternoon-that Warwickshire is in a terrible plight. Last year there were even more hon. Members from Warwickshire present; perhaps some of them are out canvassing at this very moment, persuading the electorate that the Government are not responsible for the poll tax or service cuts—contradicting the county council leader and his colleagues in Warwickshire. Tonight we heard more pleading for Warwickshire, which is always followed by an assertion that that county is so needy, whereas counties under Labour control are unpleasant and unneedy—despite the fact that they find themselves in the same circumstances and confronted by the same problems.
We heard also tonight pleading for the importance of investing in Norfolk's coastal defences to prevent the sea from washing over the Norfolk countryside. We all sympathise with the hon. Member for Great Yarmouth (Mr. Carttiss), who evidently feels that the tide is coming in on him, and probably agree that the necessary expenditure should be free from capping. Of course coastal defences are important, but every authority has a good argument for not being capped in respect of long-term expenditure to meet essential needs.
We understood from the hon. Member for Great Yarmouth that the right hon. Member for Suffolk, Coastal (Mr. Gummer) is responsible for encouraging such expenditure and providing—through the Ministry of Agriculture, Fisheries and Food—the funds that are to be capped in the coming year, but which will then be reimbursed. The Minister of Agriculture, Fisheries and Food probably knows something about the sea washing over the coastal defences in Suffolk.
The right hon. Member for Suffolk, Coastal once held the ministerial post now occupied by the hon. Member for Enfield, Southgate (Mr. Portillo), but did absolutely nothing other than to pretend that the only way to achieve


ministerial preferment was to be as nasty as possible about every Labour authority going, and as unpleasant as possible about those who need public services.
The right hon. Member for Suffolk, Coastal was one of the eight present members of the Cabinet responsible for the poll tax. They did not just vote for it in Cabinet but had a hand in progressing that legislation through its Committee stage and implementing it.
The hon. Member for Cambridgeshire, South-East (Mr. Paice) found it necessary to defend his county against the view held by Warwickshire and Norfolk that Cambridgeshire has been given far too good a deal. He felt that Cambridgeshire has not done too badly, but that it could have done better. In any event, the hon. Gentleman had got it wrong because he said that my hon. Friend the Member for Dagenham (Mr. Gould) would abolish the poll tax the moment that Labour returns to power.
I hate to disabuse the hon. Member for Cambridgeshire, South-East, but we proposed that the poll tax should be abolished this April. The Government refused to join us in making that possible. Under another of our proposals, the 20 per cent. contribution would already have been abolished.

Dame Elaine Kellett-Bowman: Labour Members did not vote for that proposal.

Mr. Blunkett: The hon. Member for Lancaster (Dame E. Kellett-Bowman), who has emerged from under one of the stones that she was examining at the time—

Mr. Gould: It was her political gravestone.

Mr. Blunkett: I would not wish anything as unpleasant as that on the hon. Lady—just mere defeat. The hon. Lady's memory is so short that she does not remember that we did vote on that proposal.

Dame Elaine Kellett-Bowman: I remember the Opposition tabling the amendment in question, and that I spoke to it—and that the Opposition did not press it to a vote.

Mr. Blunkett: I refer to the Report stage of the Local Government Finance Bill. We remember being here, and we all remember voting on that amendment. The hon. Member for Lancaster clearly nodded off at the time—

Mr. George Howarth: There must have been a full moon.

Mr. Blunkett: —but presumably she tells her electorate that she was not responsible for maintaining the 20 per cent. contribution rule.
My hon. Friend the Member for Knowsley, North (Mr. Howarth) says that there must have been a full moon on the night in question, but obviously it was not bright enough for the hon. Lady to find her way through the Ayes Lobby. Whatever the reason, she missed the Division. As a consequence, we are left with the 20 per cent. contribution—for, as we know, the hon. Lady's vote would have made all the difference.
Let me make it clear to the hon. Member for Cambridgeshire, South-East that we cannot now abolish the poll tax, technically and practically, before April 1993. In the week running up to what will presumably be a 9 April election, everyone will receive a reminder of that on the doorstep—a bill that says, "Vote Labour in the general election." That will be the legacy of Conservative
inaction.
It is, however, the hon. Member for Cannock and Burntwood (Mr. Howarth) who most needs to be reminded why we are here tonight. It is not about technical arguments concerning the intricacies of absurd indices of social need—that is, the twisted standard spending assessments; it is not even about the way in which revenue support grant has been successively reduced. It was reduced from 61 per cent. in 1979 to 49·5 per cent. in 1981, and thence to only 26·6 per cent. in the current financial year. In spending terms—in real terms—the grant is now lower than the 1981–82 allocation, even when we include the £140 reduction which, along with a £4·3 billion VAT increase, went towards trying to placate those who had suffered under the poll tax.
No; the real reason why we are here tonight is this. We are discussing how to meet the crying need that exists in our communities. The hon. Member for Cannock and Burntwood made a comment about the increase in Staffordshire county council's social service spending for the coming year; it seemed that he had missed what his hon. Friend the Minister for Health had said about the need to spend money on solving the problem—it was agreed that there was a problem—that had arisen from the pindown affair.

Ms. Walley: Is it not wholly unacceptable that Staffordshire county council should have to find £7 million from its education budget, and an equal amount from other budgets—including its social services budget, which is now so much greater as a result of the pindown problems of the preceding financial year?

Mr. Blunkett: I agree. Successive cuts have meant that a number of authorities—including Staffordshire and Hereford and Worcester—have had to increase social service spending.

Mr. Gerald Howarth: As the hon. Gentleman may appreciate, I had to cut short my speech—partly because the hon. Member for Newham, North-West (Mr. Banks) had spoken for 20 minutes.
It is true that a substantial flaw in Staffordshire's social services department was identified; but I have never called for the resignation of the chairman of the social services committee, because I recognise that the committee had a very difficult job to do. I do not consider that it has addressed the problem of delinquent children in Staffordshire, but I am certain of one thing: we all have to make hard decisions in life, and Staffordshire county council is not exempt from that. If the council is faced with the difficult choice between dealing with delinquent children and dealing with my children and those of the hon. Member for Stoke-on-Trent, North (Ms. Walley), it must get its priorities right—and I believe that it has got them wrong.

Mr. Blunkett: I, for one, am sick of hard decisions being made about the care of children in social services, or the education of children in schools. It is time for some hard decisions to be made about the country's top 5 per cent. of earners, who have made a cool £30,000 in tax cuts since the 1988 Budget. It is time to make some hard decisions about those who can afford to pay, rather than making them on the backs of those who cannot. It is time to make some hard decisions about spending on home helps. It is time to compare those who spend money on meeting needs with those who spend money on civic binges.

Dame Elaine Kellett-Bowman: On a point of order, Madam Deputy Speaker. May I draw your attention to column 22 of Hansard of 16 December 1991? We were discussing the 20 per cent. contribution for students and the Labour party did not put it to the vote.

Madam Deputy Speaker (Miss Betty Boothroyd): That is interesting, but it is hardly a point of order for the Chair. It has nothing to do with me.

Mr. Blunkett: On the following day, 17 December, we voted on the abolition of the 20 per cent. contribution for everybody on nil or low income. I am afraid that the hon. Member for Lancaster has scored another own goal, something that I hope that Middlesbrough will be doing right now. I remember that well, because I moved the motion and called the vote on it. I shall not argue about that any more because the facts speak for themselves.

Madam Deputy Speaker: I remember that, too.

Mr. Blunkett: Thank you, Madam Deputy Speaker. We both remember it well.
The debate should be about home helps and the authorities that are spending most on home help services. We should be talking about Newham, Sunderland, Sheffield, Lambeth, Derbyshire, Leeds, Gateshead, Islington, Newcastle and Salford. Those are the top 10 Labour authorities meeting the need for home help services. The 10 lowest spenders on home help services are Surrey, East Sussex, Hampshire, West Sussex, Shropshire, Dorset, Gloucester, Isle of Wight, Bexley and Hereford.

Mr. Robert G. Hughes: The hon. Gentleman is saying that there should be extra spending on those services. If there were a Labour Government, how much extra spending would there be, how quickly would it take place and where would it come from?

Mr. Blunkett: Those authorities have decided on their priorities and have not allowed them to be decided by the Government's capping system. It is clear that the Government have shifted the burden of providing services from a partnership between central and local government to the backs of ratepayers and now poll tax payers.
As my hon. Friend the Member for Dagenham made clear, the standard spending assessment and the revenue support grant are of the Government's making. The Government also decided to withdraw the area protection grant next year and the year after from key marginal seats such as Pendle, Hyndburn, Rossendale, York and Blackpool. The Government's decision also resulted in the £25 that will be added to the poll tax bills in those marginal seats. The Government decide the uniform business rate and are responsible for the level of non-collection and the additions that people will have to face in the coming year.
Those additions have been made worse by the delay in taking action on the problems experienced in using computer records in court. It was a deliberate action to delay action in order to be able to blame Labour councils for continuing non-collection problems. That was revealed earlier today, when the Secretary of State had the cheek to blame a hiccup in the parliamentary timetable last week for a failure to introduce a Bill that would be carried through with the Opposition's co-operation.
There are also the problems of gearing. That means that, for every 1 per cent. that an authority has to raise above the Government's standard spending criteria, it has to find 8 per cent. on its local bills.
To cap it all, we have universal capping. In the coming year, for the first time, every authority will be capped by the Government. They have capped key authorities for the past seven years and they have determined the expenditure and the raising of revenue in those authorities, but they still blame those authorities for so-called profligacy and high poll tax bills. The Government want it all ways. They blame the Labour authorities which have been capped for spending too much and then they have the cheek to claim credit for the expenditure on education and social services when they are pressed on whether the Government are interested in maintaining spending on public services.
The Secretary of State for Education and Science bangs his chest—or the nearest thing he can come to it—and says that he favours expenditure on schools. He says, "Look how much the Conservative Government have spent on education in the past 13 years." In fact, it is the Labour authorities which have spent that money and the Conservative Government who have successfully tried to prevent them spending it.
On social services, the Secretary of State for the Environment and his Minister of State are constantly bleating that they have increased the SSAs. As the hon. Member for Eastbourne (Mr. Bellotti) said this afternoon, they failed to tell people that SSA increases this year were not matched by revenue support grant increases. While 23 per cent. went on SSAs on average for personal social services in the current financial year, only 1·9 per cent. went on revenue support grant increases from central Government. It is the biggest con trick that the Conservatives have ever attempted to perpetrate on the British electorate—to deceive them into believing that the Government believe in spending, while they are cutting it, and to apologise for not spending on essential need—as we have heard hon. Members do this evening—while revelling in the prospect of universal capping and blaming authorities for the consequences.
In the months ahead we shall be faced with the challenge not merely of how much the bills will be—important as that is at the beginning of April when the election takes place—but with the challenge in Conservative, Liberal and Labour-controlled authorities of trying to maintain a semblance of service for those who need it most. We shall face the challenge of ensuring that children such as mine get a fair deal in schools and for ensuring that in future—

Mr. George Howarth: The hon. Member for Lancaster (Dame E. Kellett-Bowman) raised the canard that the Labour party had not voted for the 20 per cent. reduction during the various stages of the Local Government Finance Bill. I refer my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) to column 187 in Hansard of 17 December when we debated clause 1. Two hundred and thirty-five of my hon. Friends—including my hon. Friends the Members for Brightside and for Dagenham (Mr. Gould)—myself and the hon. Member for Lancaster voted on that subject.

Dame Elaine Kellett-Bowman: On a point of order, Mr. Speaker. May I correct that? I have been challenged and the truth must out. On 16 December we debated new


clause 17 tabled by Labour. It was entitled "Abolition of 20 per cent. community charge contribution and extension of community charge rebates to students from April 1992". I was prepared to vote for that, but the Opposition did not have the guts to press the issue to a vote.

Mr. Blunkett: The hon. Lady compounds foolishness with farce. I said a few moments ago that the day after that to which the hon. Lady referred, we had a vote on the substantive motion of the abolition of the 20 per cent. contribution. My hon. Friend the Member for Knowsley, North mentioned that.

Mr. Andrew Mitchell: Oh, where is chivalry?

Mr. Blunkett: Where is chivalry? I am in favour of treating ladies with respect, but not of patronising them when they are being so foolish. Perhaps we could put an end to the silliness once and for all.
The Conservatives are responsible for their own actions. They are supposed to be responsible for knowing what they voted for. They ask the electorate to take them seriously on 9 April or on 7 May. They try to pretend that they were not responsible for the poll tax and for the £14 billion which it cost us. They try to pretend that they were not responsible for the 2·5 per cent. increase in VAT, and they try to avoid being held responsible for the misery that the poll tax has brought and for the cuts in services it has inflicted on people. They try to pretend that they do not know what cuts are taking place in education, in social services, in libraries, in transport, and in leisure. They then have the cheek to say that they did not know that a vote had taken place on the 20 per cent. contribution rule. That is compounding absolute stupidity with culpability.
If that is the level of Conservative Members, we shall have no difficulty in sweeping them aside in the general election so that we can bring common sense back to local government, sense back into services and Labour back into government.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): The hon. Member for Liverpool, Walton (Mr. Kilfoyle) decided to launch an attack on the Government for not being supportive of Liverpool. He did so at the very time when my hon. Friend the Member for Salisbury (Mr. Key), the Under-Secretary of State, is with the leader of Liverpool council and the leader of the Merseyside development corporation in the United States trying to drum up investment for Liverpool and Merseyside. The Government believe in working in partnership. We are sorry if the hon. Gentleman wishes to remain outside the partnership.
During the debate, we have heard complaints about the inadequacies of the standard spending assessment in Newham, in Shropshire, in Wolverhampton, in Wigan, in Eastbourne, in Northumberland, in Calderdale, in the Isle of Wight, in Warwickshire, in Staffordshire, in Barnsley, in Langbaurgh, in Middlesbrough, in North-East Derbyshire—[HON. MEMBERS: "And Norfolk"]—and in Norfolk. That does not imply that there is any question of political bias.
The question we face is how we arrive at a fair method of distribution and what the country can afford. How right my hon. Friend the Member for Harrow, West (Mr. Hughes) was to draw attention to the question of affordability. How pitiful it was to hear not a mention

from Labour Members, once again, of what the country might be able to afford. From them, we heard only that more money should be paid out here or there, with no reference to how that money should be found.
It was easy for the hon. Member for Dagenham (Mr. Gould) to say that nobody was in favour of the standard spending assessment. The criticisms that we have heard today reflect opposite views. Some believe that we should have a larger area cost adjustment whereas others believe that we should abolish the area cost adjustment. Some believe that we put too much emphasis on the social index, whereas others believe that the social index does not fully represent the needs of a place such as Newham, in London.
The Government have made an honest, well researched and reasoned attempt to distribute the moneys available to local authorities fairly. Let it be clear that the moneys that we distribute always need to be within an envelope—a total figure—which is what the Government deem to be affordable. Given the present circumstances, how right was my hon. Friend the Member for Lancashire, West (Mr. Hind) to point out some of the remarkable increases that have been possible. The metropolitan police authorities, for example, are getting an increase of 15·6 per cent. For education SSAs in general, the increase is 7 ·1 per cent. For personal social services, the increase is 7·2 per cent.
The hon. Member for Sheffield, Brightside (Mr. Blunkett) was in some danger of misleading us in talking about the revenue support grant quantity which was increased. The amount of aggregate external finance—the amount that is made available from Government to local authorities—has risen by the same amount as the increase in the standard spending assessments.
We had welcomes for the settlement from my hon. Friends the Members for Gedling (Mr. Mitchell), for Cambridgeshire, South-West (Sir A. Grant) and for Cambridgeshire, South-East (Mr. Paice). I can assure my hon. Friend the Member for Cambridgeshire, South-West that we do not penalise police authorities for civilianising. If authorities indulge in civilianisation, the money that they receive can be used to provide more effective policing because, although the money is distributed among police authorities on the basis of their establishment numbers, it is there for all purposes and to cover all the work to be done by police authorities—by uniformed officers and civilians alike.
All three Newham Members spoke in the debate, and it is worth spending time replying to some of the points that they raised. Let me put the matter in context. For Newham, the increase in SSA is 11 per cent. per adult, and Newham will be able to spend £20 million above this year's budget. That represents an increase of 8·3 per cent. I understand, however, that Newham has a particular problem with the late rating adjustment.
Local authorities have always known that they would need to repay some general rates as a result of successful appeals against the 1973 list rateable values. Such repayments were a long-standing feature of the old system and, year in, year out, authorities had to budget for the repayments that they would have to make in the coming year. The amount to be repaid varied from year to year, but not usually dramatically and, by looking at the number of outstanding appeals as the old system came to an end, authorities could make a reasonable guess at the amount that they could expect to repay in 1990–91 and in succeeding years.
Most authorities have made provision for those repayments and now have no difficulty in meeting them. Evidently, Newham did not make such provision. We allowed that local authorities would be able to capitalise such late rating payments, but I understand that Newham has no capital receipts or credit approvals from which to cover them, so that provision is not helpful to it.
The three Newham Members came to see me yesterday and put some more arguments to me. It would be absolutely wrong of me to raise their expectations or hopes, but I will consider their arguments carefully.
My hon. Friend the Member for Great Yarmouth (Mr. Carttiss) talked about his disappointment at a difference of nearly £500,000 between the first figure that his authority was given and the final figure. I sympathise, if only because my own authority—Enfield—had a shock when it discovered a difference between the provisional figure and the final figure of £1·6 million. Whereas, for my hon. Friend's authority, the decrease represented 0·1 per cent., for my own authority it represented 0·8 per cent. I would, suggest, however that a reduction of 0·1 per cent. on a budget of more than £400 million, although disappointing, is manageable. My hon. Friend also knows that the money spent on sea defences is recoverable in the subsequent year.

Mr. Carttiss: The whole point is that the capping level can be met within this year, even though, next year, the money will be recoverable. That is the absurd state of affairs that I sought to draw to the attention of the House.

Mr. Portillo: My hon. Friend is absolutely right that the capping will bite on this year's budget, and his local authority will have to make allowances for that.
The hon. Member for Langbaurgh (Dr. Kumar) mentioned the problems of both Middlesbrough and Langbaurgh, two authorities that are overspending considerably. In the case of Middlesbrough, the capped limit is 17·3 per cent. above SSA and, in the case of Langbaurgh, it is 28·3 per cent. above SSA.
We had interesting observations on the question of Staffordshire—first from the hon. Member for Stoke-on-Trent, North (Ms. Walley) and then from my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth), who, I suggest, had much the better of the argument. Staffordshire county council has been allowed to spend £39 million more. Its standard spending assessment has increased by 7·6 per cent. per adult.
In contrast to the rest of her party, the hon. Lady said that she did not think that there was anything wrong with the overall amount that was being made available to local authorities, but that she was bothered about the distribution. I believe that the overall amount that we are making available to local authorities is what the country can afford and that the distribution is fair. The amount that has been allocated to Staffordshire allows the county to make considerable increases, even if those increases fall some way short of what it had hoped, which was my hon. Friend's point.

Ms. Walley: rose—

Mr. Portillo: No; I want to make progress and have only 15 minutes in which to reply to many hon. Members.
My right hon. Friend the Member for Shropshire, North (Mr. Biffen) spoke about the difficulties in his area.

Obviously, I was sorry to hear about them. He asked particularly that the Government should be prepared to adjust the SSA from year to year. I can give him that assurance. We have two objectives which, to some extent, are in conflict. On the one hand, we want to meet the reasonable demands that are made of us, to respond to new evidence, and to adjust the SSA where that appears appropriate; but, on the other hand, we need to maintain consistency and stability in the system between one year and another.
This year that has led the Government to propose six adjustments to the methodology. One of those adjustments had been called for by the local authority associations. They wanted us to quantify not only people spending the night in an area as visitors who had their origins in Britain, but also overseas visitors who may impose extra costs on the local authorities. I was surprised to hear that the hon. Members for Dagenham and for Newham, North-West (Mr. Banks) had some objection to that, because it seems clear that visitors do impose extra costs on local authorities and that we should do our best to measure those costs, whether the visitors are British or from overseas.

Mr. Turner: Surely the Minister understands that visitors arriving in Westminster or Wandsworth are in transit on a visit that may take them throughout the United Kingdom. The Minister and the Government have not given any recognition to all the authorities throughout the country that deal with tourists. The Government are burdening local authorities by not recognising the commitment that they have to tourism. They have again been blatantly discriminatory.

Mr. Portillo: The hon. Gentleman is simply not right. We take account of such people wherever they spend nights—

Mr. Turner: No, not in Wolverhampton.

Mr. Portillo: —whether in Wolverhampton or Bolton—[Interruption.]

Mr. Speaker: Order.

Mr. Portillo: The main beneficiaries of the change have been Camden and another London authority, Westminster. The standard spending assessment of Wolverhampton has increased by 6·7 per cent. per adult, so although the hon. Gentleman has been protesting, he can protest, not about cuts, but about reductions in the aspirations of his authority.
My hon. Friend the Member for Nuneaton (Mr. Stevens) made an excellent speech. He has devoted a tremendous amount of time and effort to the study of the standard spending assessment methodology. He must now rank as one of the experts in the House on the subject of local authority finance. He said that we need to continue to look at the SSAs. and I assure him that we shall. Last year, for example, we changed the additional amount that was put into education for special needs, varying that amount downwards, which benefited Warwickshire. This year, we have changed the distribution of the receipts of interest between counties and districts, which has been of general benefit to the counties, so Warwickshire has received benefits from the methodology changes in each of


the past two years. I share my hon. Friend's great enthusiasm for being able to incorporate the results of the latest census as soon as that is possible.
My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) wanted to know what will happen about capping. This issue is obviously relevant to several local authorities. After the budgets have been set by local authorities, my right hon. Friend the Secretary of State will test them against his capping criteria. He will then designate local authorities for capping and will propose a capping figure for them. A local authority will have the option of either accepting that cap and setting a budget and sending out bills on the basis of it or of challenging it. If it decides to challenge the cap, it will have 28 days in which to make representations to us. Ministers will be happy to receive delegations from authorities that want to make such representations and, at the end of the consultation period, Ministers will decide whether to confirm a cap at the original level or whether, in the light of representations, to vary it. Warwickshire is obviously familiar with that procedure.
We heard a clutch of speeches by hon. Members from the north of England. My hon. Friend the Member for Colne Valley (Mr. Riddick), in a valuable speech, told us what a Labour Government would be like in action. We also heard from the hon. Members for Makerfield (Mr. McCartney), for Leigh (Mr. Cunliffe) and for Barnsley, Central (Mr. Illsley). The hon. Member for Makerfield said that the Government did not take account of matters such as the rural hinterland, but he is not right. We measure things such as road length, and take account of factors such as sparsity. He said that we did not take account of social conditions, but of course we do.
Much of the debate has been about social conditions and how one measures them. What we do not do—this is where we disagree—is measure economic conditions. People such as the hon. Gentleman have said that we should measure unemployment, car ownership and other indicators of economic conditions. I can tell the hon. Gentleman and his hon. Friends that I am interested in pursuing that argument to see what extra costs will fall upon local authorities with different economic conditions. I am not yet convinced that such conditions impose extra costs and that there are appropriate sources of evidence and data, but 1 am happy to consider that argument.
My hon. Friend the Member for Portsmouth, South (Mr. Martin) made a wide-ranging and interesting speech. He pointed out the different ways in which the Government have been able to provide help to Portsmouth. That important point goes well beyond the SSAs that we are debating today. Many authorities represented in the debate obviously receive large sums from the Government in housing allocations, in grants for inner-city development and so on.
What has come through loudly and clearly from the debate is that the Government are determined to control the amount that local authorities spend, partly because that is an important means of controlling public expenditure and partly because we owe a measure of protection to local taxpayers. The Labour party—the same is true of the Liberal Democrats as represented in the speech of the hon. Member for Eastbourne (Mr. Bellotti)—has no concern whatever about local authority spending and how much it would cost local taxpayers.
The hon. Member for Dagenham naively said that local authorities believed that they had received £2 billion less in

the settlement than they needed. He implied that if local authorities said that they need £2 billion he would certainly give it to them. On top of that, he described last year's settlement as manifestly inadequate. I remind the House that, in terms of last year's settlement, we are talking of an increase in the SSAs of districts of 28 per cent. and increases for the counties of 19, 20 and 21 per cent. On top of that, the hon. Gentleman stated that he would abolish the 20 per cent. contribution rule at once. The Government have said that they will abolish that rule from 1993 and have made allowance in their public expenditure plans for that to be done.
The hon. Member for Dagenham has produced a new promise to abolish that rule from the next financial year, April 1992. Therefore, he needs to account for another £500 million of expenditure, which is required for that purpose. He needs £2 billion, which he describes as the shortfall in this year's settlement, £500 million to abolish the 20 per cent. contribution rule and an unspecified amount which, presumably, is needed for him to make good the shortfall in last year's "manifestly inadequate" settlement.
Who will pay for this? In his opening speech my right hon. Friend the Secretary of State put that question, but we have had no reply. Will the £2 billion be covered by £60 on the community charge or by a penny or more in the pound on the rate of income tax? During this debate Labour Members have not said, but we all know that the situation would be very much worse than that. As was very well said by my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo), the hon. Member for Dagenham was on television recently, and he was pressed about whether, in any circumstances, he would cap authorities that had overspent. He said:
We are opposed to capping. Let me make that quite clear.
The interviewer asked, "Whatever the circumstances?", and the hon. Gentleman replied, "Whatever the circumstances." Then the interviewer said:
You can't envisage putting up the rates by horrendous sums, by factors of 10 and 12 and 15—by putting them up by 100 per cent. if necessary? You will not intervene whatever they do. Let me just be clear about that.
The hon. Member for Dagenham said, "Yes." He said that he would not intervene even if the increase were to be 100 per cent.
Recently we have had very interesting evidence from Sheffield. It appears that the local authority there has set a budget that it believes would be allowed by a Labour Government. That budget involves increasing the community charge from the present £217 to £290 or £300—a rise of 40 per cent. Why does Sheffield council believe that a Labour Government would allow that? According to the Sheffield Star, the council believes it because Labour councillors, in confidential talks in London, have been told that
Neil Kinnock will allow their budget-busting plan to survive.

Mr. Blunkett: I should like to put on the record the fact that that report is claptrap. No such meeting as was suggested by the Minister on Radio 4 on Friday took place, nor was any such assurance given to any authority in Britain.

Mr. Portillo: I have been running this story for some time, and this is the first occasion on which I have heard from the hon. Gentleman any word of denial. If the hon.


Gentleman knows of all the meetings that have taken place, and if he knows that the Leader of the Opposition has not been involved in these matters, I shall, of course, take his word. But this story appeared in the Sheffield Star on 15 January, and I have been repeating it since last Friday, yet this is the first time we have had a categorical denial from the hon. Gentleman.

Mr. Blunkett: We were waiting for the Minister to use it.

Mr. Portillo: I have been using it, and the hon. Gentleman has said nothing by way of denial.
In any case, the hon. Gentleman is not yet entirely off the hook. On the same Channel 4 programme, the hon. Member for Dagenham was asked about his plans for a uniform business rate. We know that the Labour party intends to give back to local authorities the setting of the business rate. That would mean a much heavier burden for business, as local authority spending is rising so fast. The interviewer said to the hon. Member for Dagenham:
David Blunkett said a greater proportion of local spending will have to be funded by businesses, and they will make sure that's done in the first year. How will you control that?
The hon. Gentleman replied:
It may be said to you that that is what we will do. I'd like to know who was likely to say such a silly thing.
The interviewer said, "David Blunkett, your colleague." 
As the hon. Gentleman is keen on saying, there we have it.

Mr. Blunkett: I wish to make it clear for the record that I did not say it. "The Parliament Programme" on Channel 4 on Saturday night, on which I heard that quote, is unable to give me chapter and verse other than central office briefings.

Hon. Members: "Withdraw".

Mr. Portillo: When the hon. Member for Dagenham heard the comment attributed to the hon. Member for Brightside, he described it as "very silly".
We know that we would have higher spending from the Labour party, which would allow local authority spending to go through the roof, with the bills being paid by the community charge payer. As though that were not enough, Labour would put the bills on to the business payer as well. That is why I commend the motion to the House.

Question put:—

The House divided: Ayes 295, Noes 198.

Division No. 66]
[10 pm


AYES


Adley, Robert
Banks, Robert (Harrogate)


Aitken, Jonathan
Batiste, Spencer


Alexander, Richard
Beaumont-Dark, Anthony


Alison, Rt Hon Michael
Beggs, Roy


Allason, Rupert
Bellingham, Henry


Amery, Rt Hon Julian
Bendall, Vivian


Amess, David
Bennett, Nicholas (Pembroke)


Amos, Alan
Benyon, W.


Arbuthnot, James
Biffen, Rt Hon John


Arnold, Jacques (Gravesham)
Blackburn, Dr John G.


Arnold, Sir Thomas
Body, Sir Richard


Ashby, David
Boscawen, Hon Robert


Aspinwall, Jack
Boswell, Tim


Atkins, Robert
Bottomley, Peter


Baker, Rt Hon K. (Mole Valley)
Bottomley, Mrs Virginia


Baker, Nicholas (Dorset N)
Bowden, Gerald (Dulwich)


Baldry, Tony
Bowis, John





Boyson, Rt Hon Dr Sir Rhodes
Hargreaves, Ken (Hyndburn)


Braine, Rt Hon Sir Bernard
Harris, David


Brandon-Bravo, Martin
Haselhurst, Alan


Brazier, Julian
Hawkins, Christopher


Bright, Graham
Hayes, Jerry


Browne, John (Winchester)
Hayhoe, Rt Hon Sir Barney


Bruce, Ian (Dorset South)
Hayward, Robert


Buck, Sir Antony
Heathcoat-Amory, David


Budgen, Nicholas
Heseltine, Rt Hon Michael


Burns, Simon
Hicks, Mrs Maureen (Wolv' NE)


Butcher, John
Hicks, Robert (Cornwall SE)


Butler, Chris
Hill, James


Butterfill, John
Hind, Kenneth


Carlisle, John, (Luton N)
Hogg, Hon Douglas (Gr'th'm)


Carlisle, Kenneth (Lincoln)
Hordern, Sir Peter


Carrington, Matthew
Howard, Rt Hon Michael


Carttiss, Michael
Howarth, Alan (Strat'd-on-A)


Cash, William
Howarth, G. (Cannock &amp; B'wd)


Channon, Rt Hon Paul
Howe, Rt Hon Sir Geoffrey


Chapman, Sydney
Howell, Rt Hon David (G'dford)


Chope, Christopher
Hughes, Robert G. (Harrow W)


Churchill, Mr
Hunt, Rt Hon David


Clark, Rt Hon Alan (Plymouth)
Hunter, Andrew


Clark, Dr Michael (Rochford)
Hurd, Rt Hon Douglas


Clark, Rt Hon Sir William
Irvine, Michael


Clarke, Rt Hon K. (Rushcliffe)
Irving, Sir Charles


Colvin, Michael
Jack, Michael


Conway, Derek
Jackson, Robert


Cope, Rt Hon Sir John
Janman, Tim


Couchman, James
Johnson Smith, Sir Geoffrey


Currie, Mrs Edwina
Jones, Gwilym (Cardiff N)


Davies, Q. (Stamf'd &amp; Spald'g)
Jones, Robert B (Herts W)


Davis, David (Boothferry)
Jopling, Rt Hon Michael


Day, Stephen
Kellett-Bowman, Dame Elaine


Devlin, Tim
Kilfedder, James


Dickens, Geoffrey
King, Roger (B'ham N'thfield)


Dorrell, Stephen
King, Rt Hon Tom (Bridgwater)


Dover, Den
Kirkhope, Timothy


Dunn, Bob
Knapman, Roger


Dykes, Hugh
Knight, Greg (Derby North)


Emery, Sir Peter
Knight, Dame Jill (Edgbaston)


Evans, David (Welwyn Hatf'd)
Knowles, Michael


Evennett, David
Knox, David


Fallon, Michael
Lamont, Rt Hon Norman


Farr, Sir John
Lang, Rt Hon Ian


Favell, Tony
Latham, Michael


Field, Barry (Isle of Wight)
Lawrence, Ivan


Fishburn, John Dudley
Lee, John (Pendle)


Fookes, Dame Janet
Leigh, Edward (Gainsbor'gh)


Forsyth, Michael (Stirling)
Lennox-Boyd, Hon Mark


Forth, Eric
Lester, Jim (Broxtowe)


Fowler, Rt Hon Sir Norman
Lilley, Rt Hon Peter


Fox, Sir Marcus
Lloyd, Sir Ian (Havant)


Franks, Cecil
Lloyd, Peter (Fareham)


Freeman, Roger
Lord, Michael


French, Douglas
Luce, Rt Hon Sir Richard


Gardiner, Sir George
Lyell, Rt Hon Sir Nicholas


Garel-Jones, Rt Hon Tristan
McCrea, Rev William


Gill, Christopher
MacGregor, Rt Hon John


Gilmour, Rt Hon Sir Ian
MacKay, Andrew (E Berkshire)


Glyn, Dr Sir Alan
Maclean, David


Goodhart, Sir Philip
McLoughlin, Patrick


Goodlad, Rt Hon Alastair
McNair-Wilson, Sir Michael


Goodson-Wickes, Dr Charles
McNair-Wilson, Sir Patrick


Gorman, Mrs Teresa
Madel, David


Gorst, John
Malins, Humfrey


Grant, Sir Anthony (CambsSW)
Maples, John


Greenway, Harry (Ealing N)
Marlow, Tony


Greenway, John (Ryedale)
Marshall, Sir Michael (Arundel)


Gregory, Conal
Martin, David (Portsmouth S)


Griffiths, Peter (Portsmouth N)
Mates, Michael


Grist, Ian
Maude, Hon Francis


Ground, Patrick
Mayhew, Rt Hon Sir Patrick


Hague, William
Mellor, Rt Hon David


Hamilton, Rt Hon Archie
Meyer, Sir Anthony


Hamilton, Neil (Tatton)
Miller, Sir Hal


Hampson, Dr Keith
Mills, Iain


Hanley, Jeremy
Miscampbell, Norman


Hannam, Sir John
Mitchell, Andrew (Gedling)


Hargreaves, A. (B'ham H'll Gr')
Mitchell, Sir David






Moate, Roger
Smith, Tim (Beaconsfield)


Molyneaux, Rt Hon James
Speller, Tony


Monro, Sir Hector
Spicer, Sir Jim (Dorset W)


Montgomery, Sir Fergus
Spicer, Michael (S Worcs)


Moore, Rt Hon John
Squire, Robin


Morris, M (N'hampton S)
Stanbrook, Ivor


Morrison, Sir Charles
Stanley, Rt Hon Sir John


Morrison, Rt Hon Sir Peter
Steen, Anthony


Moss, Malcolm
Stern, Michael


Moynihan, Hon Colin
Stevens, Lewis


Neale, Sir Gerrard
Stewart, Andy (Sherwood)


Nelson, Anthony
Stewart, Rt Hon Sir Ian


Newton, Rt Hon Tony
Sumberg, David


Nicholls, Patrick
Tapsell, Sir Peter


Nicholson, David (Taunton)
Taylor, Ian (Esher)


Nicholson, Emma (Devon West)
Taylor, Sir Teddy


Norris, Steve
Temple-Morris, Peter


Onslow, Rt Hon Cranley
Thompson, Patrick (Norwich N)


Oppenheim, Phillip
Thurnham, Peter


Page, Richard
Townend, John (Bridlington)


Paice, James
Townsend, Cyril D. (B'heath)


Patnick, Irvine
Tracey, Richard


Patten, Rt Hon Chris (Bath)
Tredinnick, David


Peacock, Mrs Elizabeth
Vaughan, Sir Gerard


Porter, Barry (Wirral S)
Viggers, Peter


Porter, David (Waveney)
Waldegrave, Rt Hon William


Portillo, Michael
Walden, George


Powell, William (Corby)
Walker, Bill (T'side North)


Price, Sir David
Walker, Rt Hon P. (W'cester)


Raffan, Keith
Walters, Sir Dennis


Raison, Rt Hon Sir Timothy
Wardle, Charles (Bexhill)


Redwood, John
Warren, Kenneth


Renton, Rt Hon Tim
Watts, John


Rhodes James, Sir Robert
Wells, Bowen


Riddick, Graham
Wheeler, Sir John


Ridley, Rt Hon Nicholas
Whitney, Ray


Ridsdale, Sir Julian
Widdecombe, Ann


Roberts, Rt Hon Sir Wyn
Wiggin, Jerry


Ross, William (Londonderry E)
Wilkinson, John


Rossi, Sir Hugh
Wilshire, David


Rost, Peter
Winterton, Mrs Ann


Sackville, Hon Tom
Winterton, Nicholas


Sainsbury, Rt Hon Tim
Wolfson, Mark


Sayeed, Jonathan
Wood, Timothy


Scott, Rt Hon Nicholas
Woodcock, Dr. Mike


Shaw, David (Dover)
Yeo, Tim


Shaw, Sir Giles (Pudsey)
Young, Sir George (Acton)


Shaw, Sir Michael (Scarb')
Younger, Rt Hon George


Shepherd, Colin (Hereford)



Shepherd, Richard (Aldridge)
Tellers for the Ayes:


Sims, Roger
Mr. David Lightbown and


Skeet, Sir Trevor
Mr. John M. Taylor.




NOES


Allen, Graham
Carlile, Alex (Mont'g)


Alton, David
Carr, Michael


Anderson, Donald
Cartwright, John


Archer, Rt Hon Peter
Clark, Dr David (S Shields)


Armstrong, Hilary
Clarke, Tom (Monklands W)


Ashley, Rt Hon Jack
Clelland, David


Banks, Tony (Newham NW)
Clwyd, Mrs Ann


Barnes, Harry (Derbyshire NE)
Cohen, Harry


Barnes, Mrs Rosie (Greenwich)
Cook, Frank (Stockton N)


Barron, Kevin
Cook, Robin (Livingston)


Beith, A. J.
Corbyn, Jeremy


Bellotti, David
Cousins, Jim


Benn, Rt Hon Tony
Crowther, Stan


Bennett, A. F. (D'nt'n &amp; R'dish)
Cryer, Bob


Benton, Joseph
Cummings, John


Bidwell, Sydney
Cunliffe, Lawrence


Blunkett, David
Cunningham, Dr John


Boateng, Paul
Dalyell, Tam


Boyes, Roland
Darling, Alistair


Bradley, Keith
Davies, Rt Hon Denzil (Llanelli)


Brown, Ron (Edinburgh Leith)
Davies, Ron (Caerphilly)


Bruce, Malcolm (Gordon)
Davis, Terry (B'ham Hodge H'l)


Caborn, Richard
Dewar, Donald


Campbell, Ron (Blyth Valley)
Dixon, Don


Campbell-Savours, D. N.
Dobson, Frank


Canavan, Dennis
Doran, Frank





Duffy, Sir A. E. P.
Marek, Dr John


Dunnachie, Jimmy
Marshall, Jim (Leicester S)


Dunwoody, Hon Mrs Gwyneth
Martin, Michael J. (Springburn)


Eadie, Alexander
Martlew, Eric


Edwards, Huw
Meacher, Michael


Enright, Derek
Meale, Alan


Evans, John (St Helens N)
Michael, Alun


Fatchett, Derek
Michie, Bill (Sheffield Heeley)


Fearn, Ronald
Mitchell, Austin (G't Grimsby)


Field, Frank (Birkenhead)
Moonie, Dr Lewis


Fisher, Mark
Morgan, Rhodri


Flannery, Martin
Morley, Elliot


Flynn, Paul
Morris, Rt Hon A. (W'shawe)


Foster, Derek
Morris, Rt Hon J. (Aberavon)


Foulkes, George
Mowlam, Marjorie


Fraser, John
Mullin, Chris


Fyfe, Maria
Oakes, Rt Hon Gordon


Galbraith, Sam
O'Hara, Edward


Garrett, John (Norwich South)
O'Neill, Martin


Garrett, Ted (Wallsend)
Orme, Rt Hon Stanley


George, Bruce
Paisley, Rev Ian


Godman, Dr Norman A.
Patchett, Terry


Golding, Mrs Llin
Pawsey, James


Gordon, Mildred
Pendry, Tom


Gould, Bryan
Powell, Ray (Ogmore)


Griffiths, Nigel (Edinburgh S)
Prescott, John


Griffiths, Win (Bridgend)
Primarolo, Dawn


Grocott, Bruce
Quin, Ms Joyce


Hain, Peter
Radice, Giles


Harman, Ms Harriet
Randall, Stuart


Hattersley, Rt Hon Roy
Reid, Dr John


Haynes, Frank
Robertson, George


Heal, Mrs Sylvia
Rogers, Allan


Henderson, Doug
Rooker, Jeff


Hinchliffe, David
Ross, Ernie (Dundee W)


Hoey, Kate (Vauxhall)
Rowlands, Ted


Home Robertson, John
Ruddock, Joan


Hood, Jimmy
Sedgemore, Brian


Howarth, George (Knowsley N)
Sheerman, Barry


Howells, Geraint
Sheldon, Rt Hon Robert


Howells, Dr. Kim (Pontypridd)
Shore, Rt Hon Peter


Hoyle, Doug
Short, Clare


Hughes, John (Coventry NE)
Skinner, Dennis


Hughes, Robert (Aberdeen N)
Smith, Andrew (Oxford E)


Hughes, Simon (Southwark)
Smith, C. (Isl'ton &amp; F'bury)


Illsley, Eric
Smith, J. P. (Vale of Glam)


Ingram, Adam
Soley, Clive


Janner, Greville
Spearing, Nigel


Jones, Barry (Alyn &amp; Deeside)
Steinberg, Gerry


Jones, Ieuan (Ynys Môn)
Stephen, Nicol


Jones, Martyn (Clwyd S W)
Stott, Roger


Kaufman, Rt Hon Gerald
Strang, Gavin


Kilfoyle, Peter
Taylor, Mrs Ann (Dewsbury)


Kirkwood, Archy
Taylor, Matthew (Truro)


Kumar, Dr. Ashok
Turner, Dennis


Lamond, James
Vaz, Keith


Leadbitter, Ted
Wallace, James


Leighton, Ron
Walley, Joan


Lestor, Joan (Eccles)
Wardell, Gareth (Gower)


Lewis, Terry
Wareing, Robert N.


Litherland, Robert
Watson, Mike (Glasgow, C)


Livsey, Richard
Welsh, Michael (Doncaster N)


Lloyd, Tony (Stretford)
Wigley, Dafydd


Lofthouse, Geoffrey
Williams, Rt Hon Alan


Loyden, Eddie
Williams, Alan W. (Carm'then)


McAllion, John
Wilson, Brian


McAvoy, Thomas
Winnick, David


McCartney, Ian
Wise, Mrs Audrey


Macdonald, Calum A.
Worthington, Tony


McKay, Allen (Barnsley West)
Wray, Jimmy


McLeish, Henry



McMaster, Gordon
Tellers for the Noes:


McNamara, Kevin
Mr. Jack Thompson and


Madden, Max
Mr. Ken Eastham.


Mahon, Mrs Alice

Question accordingly agreed to.

Resolved,
That the Revenue Support Grant Report (England) 1992–93 (House of Commons Paper No. 188), a copy of which was laid before this House on 24th January, be approved.

It being after Ten o'clock, MR. SPEAKER put the Questions necessary to dispose of proceedings on the other motions relating to local government finance, pursuant to the Order [4 February].

Resolved,
That the Revenue Support Grant Distribution (Amendment) (No. 2) Report (England) (House of Commons Paper No. 190), a copy of which was laid before this House on 24th January, be approved.
That the Population Report (England) (No. 3) (House of Commons Paper No. 189), a copy of which was laid before this House on 24th January, be approved.
That the Special Grant Report (No. 3) (House of Commons Paper No. 191), a copy of which was laid before this House on 24th January, be approved.—[Mr. Heseltine.]

SUPPLEMENTARY ESTIMATES 1991–92

CLASS XX, VOTE 1

European Community (Budget)

Mr. Speaker: I have selected the amendment in the name of the hon. Member for Thanet, South (Mr. Aitken).

The Financial Secretary to the Treasury (Mr. Francis Maude): I beg to move,
That a further supplementary sum not exceeding £450,000,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges for civil services which will come in course of payment during the year ending on 31st March 1992, as set out in House of Commons Paper No. 182 of Session 1991–92.

Mr. Tony Marlow: On a point of order, Mr. Speaker. This is a very important matter, involving a great deal of money. I understand that at the moment our net contribution is of the order of £2,800 million in a year. The motion seeks to increase our contribution by £450 milion on the basis of a vote by the European Parliament the legality of which is disputed.
My hon. Friend the Financial Secretary will speak for the Government. We are grateful to him and are impressed by his ability, but my point of order to you, Mr. Speaker, is that perhaps at this time a Law Officer of the Crown should be present to explain the highly intricate legal aspects of this important issue, because a great deal of money is involved. I think that it would be for the benefit of the House if a Law Officer were present.

Mr. Speaker: What has been said will have been heard by the Deputy Chief Whip, who is on the Front Bench. We must now proceed with the debate.

Mr. Maude: As my hon. Friend the Member for Northampton, North (Mr. Marlow) has just pointed out in his point of order, the supplementary estimate which is before the House relates to our contributions to the 1992 budget of the European Communities.
The estimate is needed because the European Parliament's recent adoption of the budget is open to legal question. The Council is considering its legal position, but, because of the legal uncertainties, the Government cannot at the moment treat the 1992 budget as agreed between the institutions. Therefore, for the time being, we must approach the 1992 budget and our contributions to it on the basis that the budget has not been adopted.
When a budget has not been adopted, monthly contributions are calculated on the basis of one twelfth of the last adopted budget, in this case the 1991 budget. The European Communities Act 1972 gives authority to contribute on this basis, without further parliamentary approval. The Government are therefore seeking parliamentary approval for this estimate to cover contributions in excess of those due, had a budget for 1992 not been adopted.
The procedure we have followed in presenting this estimate reflects comments by the Treasury and Civil Service Committee in a similar situation in the early 1980s. The Committee's second report in the 1981–82 Session expressed the view that the Government should refuse payment of any disputed sums unless the matter had been debated and decided by Parliament. On two subsequent


occasions, in January 1985 and 1986, when we again needed estimates provision for part of our contribution, it was possible to provide the opportunity for debate before the first payment fell due, but the circumstances and timing in the present case prevented us from doing so again. Nevertheless, we are presenting the estimate as early as we can and well in advance of the normal spring round of estimates to provide the House with an early opportunity to debate the issue.

Mr. Chris Smith: I am grateful to the Financial Secretary for giving way, especially so early in his remarks. For the sake of clarity, will he confirm that the disputed amount between the Parliament's budget and the Council of Ministers budget relates to £12 million of expenditure by the United Kingdom, not £450 million?

Mr. Maude: The hon. Gentleman is correct. The monthly amount that the estimate seeks authority from the House to contribute to the 1992 budget is only £1 million per month—that is the disputed amount.
In the light of its legal advice, the Council will take a view on the basis for action in the European Court. Subject to that advice, the Government will urge the Council to bring a case against the Parliament. The Commission will implement the 1992 budget adopted by the European Parliament pending the Court's judgment, which we hope will soon be available.

Mr. Marlow: I am afraid that my mind moves slowly at this time of the evening—

Mr. Hugh Dykes: We understand that.

Mr. Marlow: I thank my hon. Friend for his comments.
As I understand it, we are being asked to vote an extra £450 million for an eventuality that may not arise, subject to a legal decision within European institutions—am I right or wrong? If I am right, why must we make a decision tonight on whether we are likely to approve the sum of £450 million? How does that sum relate to the £12 million or £1 million per month, which my hon. Friend has just agreed with the hon. Member for Islington, South and Finsbury (Mr. Smith)?

Mr. Maude: For reasons that we have previously debated in the House, the British contribution to the EC budget last year was abnormally and atypically low—about £1·2 billion. The underlying level of contribution is about £2 billion a year, so even if the budget had been as accepted by the Council of Ministers, a large sum in addition to last year's contribution would have been payable by the United Kingdom Government. Therefore, the amount in dispute, as has been said, is no more than £12 million in terms of the United Kingdom's contribution to the budget.

Mr. Nicholas Budgen: Will my hon. Friend explain what he means by the "underlying contribution" and the "atypical contribution", as it is difficult for us to understand?

Mr. Maude: That simply reflects an average taken over the years. For a variety of reasons, last year's abatement was substantially larger than that of the year before and that for this coming year.

Mr. Budgen: Why should we regard the average as the underlying figure? As I understand it, there is an heroic

new role for the EC. More especially, we are hoping—as I imagine the House is, as it is in favour of the gradual move towards a common currency—a vast expansion of the regional fund. Why should we expect that the average should be the underlying figure? If we wish to be at the heart of Europe, we must expect a vast increase in our contribution to that heroic enterprise.

Mr. Maude: We expect no such thing. We do not base our contribution for the coming year simply on the extrapolation and average of previous levels, but on the calculation, already available, of what the contribution will be in the coming year. Although my hon. Friend may prefer to think of it as such, it is not simply a shot in the dark.

Sir Teddy Taylor: What is my hon. Friend's latest estimate of our net contribution in 1992, assuming its legality? Does he agree with the famous Treasury and Civil Service Select Committee report, which stated in paragraph 12:
If this situation"—
which the Committee thought was unsatisfactory and unprecedented—
arose again, the Government should refuse payment"?

Mr. Maude: My hon. Friend is right to refer to that report, which stated that, if a payment were to be made, this was the procedure that we should observe. This is not a new departure. The same procedure was used on occasions in the past, apart from those to which the report referred—such as in 1985 and 1986, when comparable circumstances arose.

Mr. Roger Moate: We are asked to approve a vote of £450 million. The "Supply Estimates 1991–92 Class XX Net Contributions to European Community Institutions" baldly presents a figure of £450 million. The only explanation offered is:
Payments … resulting from the adoption by the European Parliament of a larger Budget for 1992 than that permitted by Community legislation.
We are now told that the figure amounts to approximately £1 million a month, or £12 million a year.
The motion asks for a sum of £450 million. Is the information I quoted all that the House is entitled to have, coupled with my hon. Friend's explanation—which was not at all clear? Are we talking about £12 million or £450 million? Will my hon. Friend the Financial Secretary explain why we are asked to authorise a payment of £450 million?

Mr. Maude: That sum represents the difference between our contribution last year on the basis of the 1991 budget and our contribution this year on the basis of the agreed 1992 budget. Even if the budget agreed by the Council of Ministers had been adopted, it was only slightly smaller than that adopted by the European Parliament. The bulk of the £450 million to which the estimate refers is attributable to not just the purportedly illegal portion on which the European parliament voted but the operation of the United Kingdom's abatement this year, compared with last year.

Mr. Tony Favell: A number of us are rather simple when it comes to such matters, as my hon. Friend the Financial Secretary knows. Is the sum of £450 million the total increase over last year in spending for the 12


months on which we are now embarking? Is it an extra £450 million for the whole of the year, or will there be more on top of that?

Mr. Maude: No. The United Kingdom's contribution this year, as we made clear in the budget debate before Christmas, is likely to be in the region of £2·5 billion. That compares with a contribution last year in the region of £1·2 billion. Last year's contribution was abnormally low, and compared with a contribution in 1990 of close to £3 billion—which was abnormally high.
This year's contribution not only reflects an average but is, as it happens, close to the underlying average level of contribution over the years.

Mr. Budgen: My hon. Friend has performed according to the highest traditions of his old professions at the Bar, by obscuring in a very difficult case. I refer him to page 8 of the "Supply Estimates". Does he agree with the description of the payments concerned as
Payments to the European Communities resulting from the adoption by the European Parliament of a larger Budget for 1992 than that permitted by Community legislation"?
If he agrees that we are giving authority to an illegal budget—a vast overspend—does he not also agree that that is somewhat unwise?
In the bad old days, when we were trying to achieve a balanced budget—and when our previous leader was trying to get back "her money", as she was vulgar enough to call it—we were quite keen to reduce Community expenditure. If, late at night, we agree to illegal overspending by the EEC, will we not seriously undermine the Treasury's endeavours to prevent the same from happening in the future?
My hon. Friend has been defending the Government's position in rather the same way as a highly intelligent barrister defending a very crooked fraudster. Let me sum up my two points. First, does he agree with the description given on page 8? Secondly, does he agree that it would be extremely stupid to take such action if we are to try to reduce Community expenditure in the future?

Mr. Maude: It is always a pleasure to listen to my hon. Friend when he is trying to be helpful. His intervention is much appreciated.
I concede that the passage on page 8 could have been more happily phrased; but it is wrong to interpret it as meaning that the whole £450 million flows from the disputed element of the budget.

Mr. Budgen: What words would the Financial Secretary use?

Mr. Maude: My hon. Friend has invited me to redraft the passage while I am on my feet making a speech. I shall certainly have a look at it.
My hon. Friend has asked me to contemplate a further point, and I am very ready to do that, too. He suggests that the wording undermines the Treasury's endeavours to contain Community spending. I do not believe that it does. I should point out that this is not just a United Kingdom concern; the entire Council is unanimous, and, if the case is sustainable, we shall seek to challenge the budget in the European Court of Justice. That is the right course to adopt.
We no more undermine our desire to contain Community spending—which, I should tell my hon. Friend, is as intense now as it has ever been—by adopting the measures that I invite the House to adopt tonight than we did in 1985 and 1986, in comparable circumstances. In both those years, the Government invited the House to agree a supplementary estimate in very much the same terms.

Mr. Budgen: But not for an illegal budget.

Mr. Maude: The budget was in dispute, and was not capable of being treated as having been agreed between the institutions in the way to which the European Communities Act refers. On that occasion, the Government invited the House to accept the course that is being suggested tonight.

Mr. Marlow: I am grateful to my hon. Friend for giving way: he is being extremely courteous this evening.
A couple of minutes ago, my hon. Friend said that the level of our net contribution to the Community last year—cash out of pocket per citizen—was about £25. This year, he says, it will be an extra £25. In other words, every family of four in my constituency will be asked to provide the European Community with a free handout of an extra hundred quid. What will they get for that extra hundred quid—and what do I tell them when they come to me and say, "Look, Mr. Marlow, we read our newspapers and find that European money in Italy is being fraudulently misapplied, it is ending up in the pockets of the Mafia, and you are asking us for another hundred quid, with all the other bills that we have to pay"? What does my hon. Friend think I should tell my constituents?

Mr. Maude: I am confident that my hon. Friend is resourceful enough to think of an adequate reply without my assistance.
My right hon. Friend the Member for Finchley (Mrs. Thatcher) negotiated in 1984 an abatement that is permanently in existence in Community law and can be changed only by unanimity. We have no intention of allowing it to be changed. Over the years, that has saved the British taxpayer large amounts of money that would otherwise have gone to the European Community budget in the form of an ever greater net contribution. The existence of the Fontainebleau abatements means that the amount that we contribute net to the budget, while still substantially larger than is acceptable to the House, is a good deal smaller than it would otherwise have been.

Mr. Dykes: I am grateful to my hon. Friend for giving way to someone who, unlike some previous speakers, has an objective view of these matters. My hon. Friend is a financial spokesman for a Government, who, for whatever reasons, have gone from an original expectation of no deficit or borrowing requirement to a huge deficit and a borrowing requirement of, probably, £25 million. That is a factor about which my colleagues who are against the Community have made no complaint and which they have accepted with equanimity.
Given that, could not the Financial Secretary defend the technical difficulties facing the Government with more robust energy? My hon. Friend does not have to apologise to anybody when he is talking about a mistake that represents 7 per cent. of the contingency reserve, which is an accidental aberration anyway.

Mr. Maude: I appreciate that my hon. Friend is seeking to be helpful. However, even when the British public finances were in substantial surplus, we remained equally concerned to ensure that the EC budget and our contribution to it were constrained.

Mr. Bob Cryer: The hon. Gentleman knows that the Government have continually expressed concern about expenditure being out of control in the Common Market. What sort of signal will this proposal send to the Common Market, which is still under heavy criticism for its excessive, not to say lavish, expenditure on, for example, the common agricultural policy? Will it not take this as a further signal that the Government are not concerned about scrutiny of financial expenditure?

Mr. Maude: I do not believe that it will send that signal. There is nothing revolutionary or new in the approach that the Government are advising the House to take. This has been done before, and we preserve the legal position. If the budget is being illegally adopted, the place for that to be set right is in the European Court of Justice. That is where the Council will take the case—

Several Hon. Members: rose—

Mr. Maude: I am conscious that, when we debated the budget before Christmas, I was criticised for taking up too much time with my opening speech. I do not want to be subject to the same criticism tonight, and I hope that the House will recognise that most of the time has not been taken up by me.

Mr. Budgen: My hon. Friend—

Mr. Ron Leighton: On a point of order, Mr. Deputy Speaker. Are there not two sides in the House? Although this debate is vastly entertaining and instructive, is it merely an internal party or family affair—or can members of the Opposition also join in?

Mr. Deputy Speaker (Sir Paul Dean): The Minister has already said that he does not want to take too much of the House's time in what is a fairly short debate. He has already been very generous in giving way.

Mr. Budgen: rose—

Mr. Frank Haynes: Further to that point of order, Mr. Deputy Speaker. This is a very important point, and we want to pin it down. If we do not pin it down now, it will not be pinned down tonight.

Mr. Budgen: May I make a final attempt to pin the Minister down?

Mr. Deputy Speaker: Order. Is the Minister giving way?

Mr. Maude: Yes.

Mr. Budgen: My hon. Friend refers to previous years in which there has been a dispute between the United Kingdom—I assume that we are still allowed to refer to the "United Kingdom"—and our masters in the European Community. My recollection is that, on previous occasions, there was a dispute about the necessity for discretionary areas of expenditure, especially in relation to agriculture.
There is a sharp distinction between that and what is set out in the supplementary estimates, which is illegal overspending. Will my hon. Friend confirm that, in

previous years when there was a dispute, there was no suggestion that the EC was illegally overspending and that, therefore, today's debate is about something quite different? We are being asked to give parliamentary support for expenditure which, as stated on page 8, is greater than that "permitted by Community legislation".

Mr. Maude: I do not believe that we are asking the House to underpin an illegal arrangement. The right way to contest that budget, if it is found to be illegal, is in the Court and that is what the Council of Ministers will seek to do. When a budget has not been agreed between the institutions, arrangements have always been made to allow payments to be made in any event. That is the course that the Government are inviting the House to follow.

Mr. Leighton: Bearing in mind the fact that many of the member states pay nothing in net terms, can the Minister explain why he uses the curious phrase that more than £1·2 billion is an abnormally low figure? He is telling us, I think, that we have to pay another £450 million this year. What exactly shall we get in return for that money? As we are one of the poorer nations of the Community, why are we not a net beneficiary? Is it not true that we are paying more money into the Community budget to subsidise nations richer than ourselves than we give in aid to the third world? Does that make much sense?

Mr. Maude: We have discussed these matters before, so the hon. Gentleman knows that the amount that we pay in net contributions to the budget is substantially less today than it would have been had we not had to renegotiate a much better arrangement than that which we inherited in 1979.

Mr. Leighton: indicated dissent.

Mr. Maude: The hon. Gentleman shakes his head, but he should acknowledge that the arrangements negotiated by the previous Labour Government were extremely disadvantageous to the United Kingdom. It took my right hon. Friend's negotiations year after year to improve the position which leaves the contribution as relatively limited as it is, although it remains unsatisfactorily large.

Mr. Anthony Beaumont-Dark: We understand the Minister's problem although he is arguing a very poor case with his usual great charm and expediency. If it is true that the proposal may be illegal and we shall have to go to the Court, why the hell do we not wait to learn what the Court says? If it is ruled to be illegal, surely we would get the money back. The other lot, when they were in power, did not do a very good job of ensuring that we saved money, but it seems odd to most of us to argue that, because we have done a wonderful job, we are happy to make an illegal payment. To help with his problems, I suggest to the Minister that he withdraws the motion until we find out whether it is a legal or illegal payment. Is that not a helpful and sensible suggestion?

Mr. Maude: I am deluged with helpful suggestions tonight, and I am very grateful to my hon. Friend for making yet another. My hon. Friend put his finger on the point. If the budget is eventually found to be illegal, it is perfectly possible—indeed, it would happen automatically —for the disputed amount of £1 million per month to be recouped as a matter of course. There is no problem about that. I stress to the House that the position of the United


Kingdom Government and their net contribution to the EC budget is not prejudiced by the supplementary estimate which I invite the House to adopt tonight.

Mr. Haynes: I hope that the Financial Secretary will listen. The Government have their hands in our pockets again. Is it true that the Government have to bring expenditure to the House for approval first? Will the Minister nod to that? Is it true that any Government expenditure has to be approved by the House?

Mr. Maude: indicated assent.

Mr. Haynes: The Minister agrees. Now we are getting somewhere. The point is that, in Europe, they have got it all wrong, and they have made a cock-up of the job. Now the Minister comes to the House for an additional £450 million because the European budget has already been approved. The Minister is here again because they made a cock-up over there. I will have to go back and tell my constituents that the Government have got their hands in their pockets again.

Mr. Maude: It is not the Government who have their hands in the hon. Gentleman's constituents' pockets. It is the European Community financial arrangements which were negotiated with such skill by the Government whom the hon. Gentleman supported in the late 1970s. I have to—

Mr. Haynes: On a point of order, Mr. Deputy Speaker. I was not a Member of the House at that time, and I do not know what the Minister is talking about. Please call him to order, Mr. Deputy Speaker.

Mr. Maude: For the avoidance of doubt, I concede freely that the hon. Gentleman was not then a Member of the House, although I recollect that he sought unsuccessfully to become a Member. In support—

Mr. Haynes: On a point of order, Mr. Deputy Speaker. I was not a candidate until 1979. The Minister has got it wrong again. He gets it wrong all the time. Please pull him up, Mr. Deputy Speaker.

Mr. Maude: I had not appreciated that the hon. Gentleman joined the Labour party so late in life. He has been a very welcome member of it ever since.

Several Hon. Members: rose—

Mr. Maude: I am conscious that the House wishes to proceed. I have given way in the course of this speech more than I have given way in all my other speeches in the House since I became a Minister. I cannot be accused of treating the House with discourtesy.
The interjections in the speech by my hon. Friends and by other hon. Members have enabled me to set out the case fully. On the basis of those arguments, I invite the House to approve the supplementary estimates.

Mr. Chris Smith: The hon. Member for Wolverhampton, South-West (Mr. Budgen) drew attention to the Government's description of the motion on page 8 of the supplementary estimates booklet. That description refers to

Payments to the European Communities resulting from the adoption by the European Parliament of a larger Budget for 1992 than that permitted by Community legislation.
The figure of £450 million is attached. If that were an accurate description of the situation, it would be a matter of great seriousness to the House. We would be talking about a total of almost £500 million for a budget that appeared to be illegal. However, that is not the situation that faces us. The Government's description is at best inaccurate and it is certainly misleading.
First, in making the European Community budget, the European Parliament cannot and does not act alone. The Parliament and the Council of Ministers acting together form the budgetary authority in the European Community. The Parliament took its most recent decision on the budget on 12 December. It is perhaps worth noting that, when the budgetary committee of the European Parliament met on 9 December, the two Conservative representatives on that committee —Mr. Kellett-Bowman and Mr. Simpson—both voted in favour of the Parliament's budget. It is also worth noting that, when the budget went to the full European Parliament three days later, 29 Conservative Members of the European Parliament voted in favour of the budget.

Mr. Budgen: Does not the hon. Gentleman recognise that there is a clear conflict of interest between Conservative Members of the European Parliament and Conservative Members of Parliament? Quite honourably, the MEPs have sworn their allegiance to a supranational federal structure to which they wish to give enhanced power and extra expenditure. It is naive to pretend that those who vote for extra expenditure in the European Parliament have the same views or the same interests as Members of this House.

Mr. Smith: I was under the obviously mistaken impression that the Conservative party that the MEPs represented was the same as the Conservative party that the hon. Gentleman represents.
The budgetary process, which is a matter for Parliament and the Council of Ministers, has not yet run its full course. As the Minister was forced to admit by the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), it is perfectly open to the Government to argue within the Council of Ministers for a challenge, through the European Court, to the budget that the Parliament decided on 12 December. The deadline for taking such a challenge to the European Court is 19 February. It is up to the Government and the Council of Ministers to decide whether they wish to mount such a challenge, and they have two more weeks in which to make that decision.

Mr. Maude: The hon. Gentleman said that I was forced to admit that it was open to the Council of Ministers to do that—not a bit of it. I owned up to it perfectly freely—indeed, it is not a question of owning up or admitting to it; I set it before the House. It is clearly the case and there is no secret or anything startling about it.

Mr. Smith: If it is, indeed, clearly the case, we must ask why on earth the motion and the supplementary estimates are before us today. The motion is totally unnecessary if the Council of Ministers is still making a decision about whether to go to the European Court—as it did two years ago—in a process that is a perfectly normal part of the budget-making process. If that is so, it would be wrong to


describe the present state of the budget as illegal and it is unnecessary to bring the motion before us. The Government have got the procedure about face.

Mr. William Cash: rose—

Mr. James Hill: rose—

Mr. Smith: I shall give way to the hon. Member for Southampton, Test (Mr. Hill).

Mr. Hill: I thank the hon. Gentleman for his courtesy. I understand that the rules of the European Parliament have been the same for many years in that the Parliament has the ability to vary the budget that is presented to it by about 6 per cent. Of course, that can be challenged. which is where the difficulty is beginning to arise. At the moment, there is no approved budget and the supplementary £450 million is a contingency amount to enable the Community to be able to pay its wages and to keep the Community going. The European Parliament is in a strong position against the Council of Ministers and perhaps even the Commission. The money is needed until the difficulties are sorted out either by the law courts in Luxembourg or by the Council of Ministers giving way.

Mr. Smith: As happened two years ago, it would have been far more sensible to mount a challenge in the courts if the Council of Ministers felt that appropriate and for the disputed elements in the budget—to which I shall come in a moment, because it is worth taking a look at the subject of the dispute—to be effectively frozen and for everything else to be released while the dispute was resolved by the courts. That would have been the sensible procedure, but I am afraid that that is not the way that the Government or Council of Ministers chose.

Mr. Budgen: rose—

Mr. Smith: I have given way once to the hon. Gentleman and will not do so now because I should like to make progress and—

Mr. Nigel Spearing: rose—

Mr. Smith: I shall give way for the last time to my hon. Friend.

Mr. Spearing: Referring to the answer that he has just given, is my hon. Friend aware of the 1982 recommendations of the Select Committee on the Treasury and Civil Service when the next such occasion arose when, whether or not it was sensible, the procedure that the Government have now adopted—however well explained or unexplained—was recommended? That is why they are doing it now.

Mr. Smith: I believe that the Government have adopted an unnecessary and incorrect procedure, which has certainly not been well explained. My hon. Friend will be aware that the 1982 Select Committee report has already been mentioned. Instead of the Government's rushing to the House with a supplementary estimate vote, it would have been more sensible to ensure that the matter was sorted out in the normal budgetary procedure.

Mr. Cash: rose—

Mr. Terence L. Higgins: rose—

Mr. Smith: I shall give way to the Chairman of the Select Committee on the Treasury and Civil Service, but must then make progress because other hon. Members want to participate.

Mr. Higgins: The purpose of the Select Committee's recommendation at that time was that the House should have an opportunity to debate and consider the matter before the money was handed over. That seemed a sensible arrangement. If we were to proceed as the hon. Gentleman has just suggested and the court case were to go against us, we would be liable for penal rates of interest. The overall effect on our finances would thereby be worsened. That is why that is not a sensible way of proceeding.

Mr. Smith: I follow the right hon. Gentleman about the need to ensure that the House has the opportunity to debate these matters. It is perfectly open to the Government to ensure that that takes place at any stage of the budgetary process. We had our all-too-brief debate on the budget a couple of months ago. As on several other occasions, I should certainly endorse greater openness and parliamentary accountability about what our Ministers get up to in the Council of Ministers.
The first point to bear in mind is that I believe that the procedure we are undertaking tonight is unnecessary.

Mr. Budgen: rose—

Mr. Smith: I shall not give way because of the pressure of time.
The second point is that the increases in the budget, voted by the European Parliament in December, are within the financial perspective for 1992—a financial perspective endorsed and agreed by this Government some years ago.
The 1992 budget, as voted by the Parliament, also represents 1·11 per cent. of Community gross national product, which is 0·09 per cent. below the upper limit of EC expenditure set when the financial perspective was agreed four years ago.
It began to emerge from what the Financial Secretary said that the figure of £450 million is somewhat misleading. The dispute between the European Parliament and the Council of Ministers relates to a far smaller figure than the £450 million British contribution that is before us. The Financial Secretary accepted that, on the Government's own admission, we are talking about an actual difference—an actual dispute—of £12 million for the year.
The root cause of the difference lies with the Foreign Ministers of the Community. Some time ago they decided, collectively, that it would be a good idea if the EC made available substantial sums of additional aid to eastern Europe and the former Soviet Union. They recommended amounts including 860 million ecu in aid for the former Soviet Union and the countries of eastern Europe, 300 million ecu for humanitarian aid, 300 million ecu to bring the structural funds into line with the real rate of inflation and other sums for the tropical rain forests.
The Council of Ministers included those amounts in the budget. However, in recompense for adding those amounts, it said that it did not agree with some of the items that the European Parliament had included in the draft budget. Those items included an appropriation for improving the early-warning system relating to trends in


agricultural expenditure—an extremely important monitoring measure in which the Government should be interested—and appropriations for research and development expenditure at a level commensurate with the agreements reached between the Parliament and the Commission.
The dispute is about additions to the budget for eastern Europe and the former Soviet Union, which the Council of Ministers wants to include in the budget, and amounts, principally for expenditure on research and development, which the European Parliament wants to include in the budget.
I have nothing against improving our aid profile to eastern Europe and the former Soviet Union. We all know how important that task is and how strongly the Prime Minister has endorsed it in recent weeks. However, I do not believe that that should take place at the expense of research and development assistance, which our country desperately needs. In fact, Britain receives the lion's share of such expenditure by the EC. We are a net beneficiary of EC funds in terms of reserch and development rather than a net contributor. The Government's proposal would wish upon us a lower amount of such expenditure than would otherwise have been the case. The motion is not only unnecessary but, if the Council of Ministers had its way, it would reduce desperately needed research and development funds.
I want to turn very briefly to the related, but not directly associated, issue of additionality. This concerns European Community budget moneys that we are in danger of being unable to use because of the fact that the Government refuse to accept the rules of procedure. At risk are potential grants of £114 million, under the RECHAR programme, to the coalfield areas of this country, as well as amounts under other regional investment programmes. The dispute is a simple one. It is between the Commission and the Government. The Commission points to article 9 of regulation 4253/88, which states that the money under the regional fund must have
a genuine additional economic impact in the regions concerned.

Mr. Cash: Is anyone listening?

Mr. Smith: The hon. Gentleman asks whether anyone is listening. In the coalfield communities of this country, there are many many hundreds of thousands of people for whom this issue is extremely important. As a direct result of the Government's activity and their refusal to abide by the rules, which they endorsed when they agreed the directive, we are losing a large amount in regional investment funds.

Mr. Cash: On a point of order, Mr. Deputy Speaker. I am confident that the hon. Gentleman's point is not directly relevant to this issue. However, may I ask whether it is not the case that Mr. Bruce Millan, the Commissioner, endorsed these very proposals when he was a Minister?

Mr. Deputy Speaker: That is a point for debate, rather than a point of order.

Mr. Smith: We are addressing ourselves to the European Community budget. It seems to me that it is extremely relevant that we should look at funds that are in the budget and ought to be available to the coalfield areas

of this country but are not reaching them. I realise that Conservative Members may not like to hear about additionality and about the RECHAR programme. I realise that they may not want to hear about what the Government's activity is denying us.

Mr. Rupert Allason: On a point of order, Mr. Deputy Speaker. Is this debate about the entire Community budget or strictly about this supplementary estimate?

Mr. Deputy Speaker: It is certainly about the supplementary estimate, and I am sure that the hon. Gentleman will address his remarks to that matter.

Mr. Smith: Indeed, I am doing just that. I am addressing my remarks to the £450 million that the Government say should be included. Some of that money goes to the regional funds, which are the subject if the additionality dispute. It is entirely in order to raise this matter, which gives rise to very considerable concern. The hon. Member for Stafford (Mr. Cash) parrots the Secretary of State for the Environment. What he has said is a total misrepresentation of the truth. The rules on additionality came into effect only in 1988. That happened because our Government sat down with the other Governments and agreed that they should come into effect.

Sir Hugh Rossi: I recall that, when I was in office in Northern Ireland in 1988, the principle of additionality then applied to moneys that were sought to be given by the Commission for the benefit of Northern Ireland, so I am not sure of the history to which the hon. Gentleman is referring.
As the hon. Gentleman has mentioned the coalfields and has introduced that matter into this narrow debate, may I ask whether he is suggesting that the Government should deduct from the £450 million the money that the Commission is withholding from this country? Would he support the Government if that were the proposal?

Mr. Smith: I was referring—had the hon. Gentleman been listening he might have noticed—to regulation 4253/88 passed by the Council of Ministers, including Ministers representing the British Government. I want to ensure that the British Government put enough openness and transparency into the system of regional aid and the RECHAR programme so that our coalfields can get access to the funds due to them. The Government are at fault in ensuring that the money does not come to the coalfield communities, and attempts by the hon. Member for Stafford and various Ministers, including the Secretary of State for the Environment, to say otherwise are nothing short of deliberately misleading.
The Secretary of State for the Environment in 1989, commenting that the structural funds were to be almost doubled over five years, added that, without the principle of additionality, Community funding would become a farce. In 1989, he endorsed the principle of additionality, as had the Government in 1988, but now the Government are refusing to accept the rules that they helped to make. It is about time that the Government changed their approach and made sure that funds that are needed in the coalfield communities of this country reach the places that need them. If they are not prepared to do that, they should give up and make way for a Labour Government to take office, and we will ensure that it happens.

Sir Teddy Taylor: I beg to move,
That Class XX, Vote 1 be reduced by £100,000.
I ask the House to support a brief and narrow amendment simply expressing our concern about the direction of policy that the Government are proposing, our outrage at the waste of money by the EC, and the total lack of control.
In considering whether we are being told exactly how things stand, I appeal to the Financial Secretary to examine page 2 as well as page 8 of the estimates. Whereas we know that this is the result of an unlawful budget, page 2 talks not about £1 million or £10 million but says that the estimates increase spending by £450 million to £166,431,002,000. So basically it says that, as a result of what we are doing tonight, the estimates are being increased to that specified sum.
But even if we say that that does not matter—even if we save just tuppence—I plead with hon. Members, before deciding on this issue, to consider what happened in 1982 when the same situation arose. The report of the Select Committee at that time said that a precedent was being created. Having said that it considered it to be an unsatisfactory precedent, it recommended that, if it ever happened again, we should not pay the disputed sum.
That is the only issue before the House tonight. Is it right for Parliament to authorise payment for something that is unlawful? If local councillors did what was unlawful and exceeded their budget, they would be individually surcharged. On the same basis, hon. Members who tonight support what is proposed should be surcharged in the sum of £1 million. They would then think twice before lending their support, for I doubt whether many could afford such a surcharge. If a business firm were to spend money illegally, its members could be put in prison. When we consider the hardships suffered by many people in the country today, are we right to vote money illegally?

Mr. Marlow: Opposition Front-Bench Members have suggested that the Government may not, with the other members of the Council of Ministers, challenge this illegal budget. Does my hon. Friend know whether this illegal budget will be challenged, and what is his reaction to that?

Sir Teddy Taylor: I do not know. The same thing happened last time and the Committee asked why our Government did not challenge it. What is the point of saying that we will wait until the Twelve do so? Who are the Twelve? Are they all countries that are paying in money? We know that until recently Britain paid in and Germany paid in, and everybody else took out. Where is the financial control there? Where is the great desire to ensure that there is not extra or illegal spending?

Mr. Budgen: May not my hon. Friend be out of touch with the more progressive and on-going attitude of our party at the present time? As I understand it, we now most of all desire to he at the heart of Europe. Surely that must mean that from time to time we simply lie down and give in to any illegal demands. Would anything else not be completely out of kilter with the modern desire to be friendly to everybody and to avoid confrontation? Surely consensus politics demands that we simply hand the money over. That is what has been done in a large number of other areas, and it would be monstrous not to do the same in relation to Europe.

Sir Teddy Taylor: I am sorry, but I cannot agree with my hon. Friend. I think that if Europe is to be a progressive, forward-looking entity it must have the same principle as we had in the House of Commons—that money is paid out only if it is legally justified, if Parliament authorises it. We do not pay it out and say that we will see if we can get it back later.
It has been suggested that the amount is small. The Minister knows that that is a load of rubbish. Let us look at what happened in November 1987. Labour Members who attend all these debates faithfully will remember it. The previous Prime Minister said that we would make sure that we had strict budgetary controls. She said that we would give them lots of extra money and then the same thing could never happen again. And what happened? They overspent wildly by having a metric year of 10 months, with 12 months of income and 10 months of spending. There was a massive overspend. If hon. Members apply the metric principle to their own balance sheets, they will find that they do very well indeed.
We were told what happened last time. A person called Mr. Spreckley, who works for the Treasury, gave evidence.
He said:
As the Lord Privy Seal said at the time of his statement, it would have been preferable had everybody agreed not to pay these disputed sums.
Does Parliament want to make illegal payment or does it not? That is the only issue.

Mr. Allason: Would my hon. Friend care to speculate on exactly how the European Community can spend this money if it is not authorised to do so by the European Parliament? As I understand it, we are being asked now to make a payment which will be a part of the illegal budget. How will the Community be able to receive it and to spend it?

Sir Teddy Taylor: I can tell my hon. Friend that it is because, sadly, as he well knows, there are accountancy fiddles daily within the European Community. He knows that what happened in 1988 was a fiddle and a fraud. All hon. Members know it.
We should consider this simple issue: is it right, when the Select Committee told us in 1982 that we should not do it again, that we should not pay the money until there is a full debate?
Any hon. Member who believes in democracy must agree that it is a disgrace and an outrage that we are discussing this vital issue at this time of night, when nobody will know about it, nobody will listen and no one will hear about it. It is a disgrace that all the dirty things to do with Europe, all the scandals of Europe, all the wastes and frauds of Europe, are always discussed here at the dead of night so that people outside do not know what is going on.

Mr. Favell: Has it occurred to my hon. Friend that the winter Olympics will open next weekend? The draft general budget for 1992, which we are discussing today, refers to a second report by the ad hoc committee on a People's Europe, which relates to an appropriation of some £8 million. It then says:
This appropriation is intended to cover expenditure on financing certain public relations projects in connection with a major Community presence at the 1992 Olympic Games in Albertville and Barcelona, in particular participation in the opening and closing ceremonies and action to underpin the


Community identity of athletes from the Member States. To this end, the European Community flag will be used, particularly during the presentation of medals.
That is to cost £8 million. The Community has already spent £700,000, on the world student games in Sheffield in July on what became known in Sheffield as "Europe Day". If my hon. Friend the Member for Southend, East watched the rugby world cup, he will have seen that every time a player threw a ball in, a European flag appeared behind him. Unfortunately, I have been unable to discover how much that cost, but the advertising agent assures me that the Community was the patron.

Sir Teddy Taylor: My hon. Friend is quite right, and hon. Members should be concerned about that. They should not smile about it because it is a waste of money.

Mr. Budgen: Will my hon. Friend give way?

Sir Teddy Taylor: No, certainly not.
My hon. Friend the Member for Billericay (Mrs. Gorman), who is always so conscientious, will confirm that the EC has just given Essex county council a grant to assist it in dealing with the problems created by Essex boy and Essex girl jokes. Furthermore, the EC has paid 170 million lira to a mafia-controlled firm for delivering non-existent fruit juice to NATO headquarters in Palermo, and it cannot get the money back. Ultimately, those who care about cash, especially hon. Members from Northern Ireland who know about poverty because they see so much of it, will be concerned that we should not waste money.

Mr. Budgen: Will my hon. Friend give way?

Sir Teddy Taylor: Certainly not.
There are one or two fanatics around whom we should disregard. One or two of the Euromugs, including the hon. Member for Islington, South and Finsbury (Mr. Smith), give us the same old drivel every time. They say that the Common Market is wonderful and should be given more money to spend. The realists are concerned about people's problems. The time has come for the House of Commons to make a stand and say that we are fed up with fraud, waste and the European Community spending money that it is not authorised to spend.
My hon. Friend the Minister has said that we should not bother about the matter too much because the paper does not really mean what it says. Although this expensive paper produced by the Treasury says that an extra £450 million is wanted to pay for an illegal budget, my hon. Friend says that it does not really mean that. Although it says that it will put up the Government estimates by £450 million to £166,431,002,000, my hon. Friend says that it does not really mean that. We are fed up to the teeth with this because we know that people are suffering from it. Money matters.
My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) is always present during these debates because he is concerned about protecting people's interests. He was telling me what that £450 million will mean. For every pensioner on housing benefit, it will mean £5 a week, which is a lot of money. So we are not talking about silly amounts.
We should bear in mind that, when this happened before, a Select Committee told us that next time it happens we should not be mugs and pay it but should just

say no. It told us that if the Community wants Britain to pay for illegal money, we should let it take us to court. The Council of Ministers should be aware that, if that matter goes to the European Court, we might win. The majority of the members of that Council are being paid cash for being in the EC. The time has come to say no.
We have tabled a modest amendment. It does not seek to scrap the motion or wreck the Government's policy—

Mr. Richard Shepherd: We have been trying to do that for years.

Sir Teddy Taylor: My hon. Friend is right.
We say to the moderate Members who feel that something is wrong and should be put right that they should vote in favour of reducing the payment by £100,000. Let us give that to the poor and to the places which need help. In other words, we are not suggesting that the Conservative party or the Labour party should stand on its head. We simply say that we are fed up to the teeth with the waste and extravagance throughout Europe, and with the fact that expenditure is not controlled.
At the end of the day, the House of Commons should not be asked to pay for unlawful money. That is what we are being asked to do tonight. When that last happened, hon. Members will remember, a chap called King Charles had his head chopped off. The time has come for someone's head to roll. We have to stand firm.
There are not many hon. Members present. By having the debate late at night, the Government have made sure that the public will not hear about it. We have to stand firm. I appeal to the Labour Members who are always here—the decent, conscientious people who fight for the interests of their country—and to Conservative Members too to remember that democracy is more important than party politics. Therefore, I appeal to the House to make a gesture by voting for the modest amendment. In that way the House will say that the time has come to say no, and it will give a warning that it is fed up.

Mr. Denzil Davies: The Financial Secretary sought to give the impression that somehow the post-Fontainebleau arrangements negotiated by the Government were superior to those negotiated by the Labour Government. He is nodding his head. The system of payments that existed between 1972 and the Fontainebleau agreement of 1984 was negotiated by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) when the country acceded to the treaty of Rome. From 1972 to 1984 that was the system. From 1972 to 1977 there was a five-year transitional period. It was only in 1978 that the system of full payments came in.
There was an election in 1979. It took the Government five years to reach the Fontainebleau agreement. I make no complaint about that and pay tribute to the Government for doing so, but the Financial Secretary should not give the impression that somehow the system that the Conservative Government negotiated was better than that negotiated by the Labour Government.

Mr. Maude: I simply remind the right hon. Gentleman of what the Labour Government said at the time, which was that they had renegotiated the arrangements.

Mr. Davies: They were never renegotiated.


May I make another point to the hon. Gentleman? Apparently some of the payments will be in respect of a possible illegal budget. This is not the first time that has happened. In 1978 there was a possible illegal budget exactly like this one, but the Labour Government did not come to the House and seek approval to pay money over while a dispute was going on. We stopped the cheque. By doing so, we got agreement fairly quickly. Stopping the cheque concentrates the mind, especially of the Commission. The Government should not pay the money. That would lead to the dispute being resolved quickly. The Government should not seek approval to pay money in respect of what could be an illegal budget.
Let us consider the Fontainebleau agreement. Despite that agreement, the United Kingdom is still the second largest net contributor to the budget. There are only two net contributors, year in, year out—Germany and Britain. It is no good the Minister shaking his head. France sometimes becomes a net contributor; the following year it probably is not. Next year we will contribute £2·45 billion to the Community budget. Yet in terms of the per capita GDP, the wealth of the country, we rank below Luxembourg, Germany, France, Italy, Denmark and probably Holland. Despite that, we are the second major net contributor to the budget. Despite Fontainebleau, we are in the same relative position as we were before that agreement.
There must be something wrong with such a system, and we know what it is. We import more, we consume more and the common agricultural policy does not benefit us because we do not receive the payments because of the size and structure of our agricultural sector.
Some people fondly believe that if we could reform the CAP we would pay less. This is not the place to debate the MacSharry proposals—I do not understand them all—but, having read them cursorily, I do not think that we would pay less even if the CAP were reformed under the MacSharry proposals. I do not believe that it will ever be reformed from inside, but if it were there would be large redundancy payments to the smaller farmers of Europe. The motor car workers who return home at night and milk a few cows will receive redundancy payments under the MacSharry plan, whereas the official farmers will be thrown to the market place and will not receive payments. To think that a reform of the CAP, should it ever take place, would reduce our contribution is to live in cloud cuckoo land.
It was suggested that if we could convert the CAP so that it withered away and became a sort of common regional policy, we would benefit. I am not sure about that. The Maastricht agreement contains a section dealing with "social cohesion"—I think that that is the latest phrase to be in vogue in the Community. As I understand it, the infrastructure fund is paid to member states in which the gross domestic product per head of population is below that of the Community average—£100. The rate for the United Kingdom is more than £100, countries with below average rates are Southern Ireland, Spain, Portugal and Greece. Therefore, even the new common regional policy will not benefit us, despite the fact that GDP per head in Wales is £85—or £87 last year—in Scotland the figure hovers around £100, for the north of England the figure is below £100 and in the west midlands it is below £100, as it is in the north-west. Even that attempt at social cohesion

does not benefit a country such as the United Kingdom in which the GDP per head is higher than the Community average.
I do not know how we shall benefit from any of the systems, yet we must do so. If we move towards economic and monetary union, the countries and regions on the Community's fringes—such as Wales, the north-west and the south-west—will suffer from the concentration and centralisation of a common currency.
Next year, we will repay £2·5 billion—a not abnormally high amount—in public expenditure. That money could be used for hospitals, schools, research and development—which my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) rightly said was important. That money will go across the exchanges to the undemocratic, bureaucratic institution and we shall never get it back. I do not believe that that institution will ever be reformed from the inside. The only hope—and it may be vain—is that changes in Europe and the enlargement of the Community will bring down the whole, silly edifice. The sooner that that happens, the better.

Rev. Ian Paisley: On the issue of additionality, it should be known that there is a constant fight between the Treasury and Ministers heading their Departments. Today I spoke to the Minister who is in charge of agriculture in Northern Ireland. He told me that he was fighting for moneys that his Department should receive, and that the Treasury was holding them up.
I believe that money from Europe that is earmarked for a specific job in a certain district in the United Kingdom should be additional money used for that purpose. Many schemes, such as the Spede scheme in Northern Ireland, are suffering at present, whereas those benefiting from the system in the Irish republic are using that power and money to undercut our economy. They already have their money. All sorts of additional moneys should be coming to us, and we should try to settle that issue once and for all.
If any Department had presented this estimate with such a degree of misrepresentation and falsehoods, the Minister involved would have been hounded out of the House. The Financial Secretary says that the House has not been given an accurate account of the provision for which it is asked to vote. We were given all sorts of explanations. Some tell us that we are voting for only £1 million a month, and others that the figure might be the whole £450 million. The House should know exactly how much it is being asked to pay.
The Financial Secretary nodded when the hon. Member for Ashfield (Mr. Haynes) asked whether the consent of the House was required. When the hon. Member for Ashfield said,
The Government have their hands in our pockets again",
the Minister replied, "I do not have my hands in your pockets, but Europe does." It is the Minister's business to get Europe's hands out of the nation's pockets, because they are the hands of a thief. They are the hands of a law-breaker. They are the hands of a criminal. It is the Financial Secretary's duty to stop Europe's criminal practices.
I am asked as a Member of the House to vote on something that is not permitted by Community legislation. Let us admit that. If that is so, how can a Minister who believes in law and order ask the House to vote for something that is illegal? I say to the Financial Secretary


that if he wants to impress Europe he must take the action suggested by the right hon. Member for Llanelli (Mr. Davies), and tell Europe, "We're not giving you the money. Go to the courts and ask for the money. If the courts of Europe say that we have to pay, we will consider it again." He should promise not to pay, but only to reconsider. That is the attitude that the Minister should adopt.

Mr. Cash: In view of my hon. Friend's extremely effective speech, does he consider that we ought to refer the matter to the Privileges Committee or to the Chairman of Ways and Means? If the House, even on the Government's own admission, is expected to make an illegal payment of as little, comparatively speaking, as £12 million—let alone £450 million on the Order Paper—that should be investigated by the House. We cannot be an engine of fraud. If the issue were referred to the courts, they would decide against the House. Does not my hon. Friend seriously consider having the matter thoroughly investigated—and not merely at this time of night?

Rev. Ian Paisley: Anything that could stop a law-breaker should be employed. That is what we are saying in Northern Ireland. We should take steps to stop the law-breakers—and we have deliberate law-breaking here. It is for the Minister to take Europe's hand—and I trust that he has a supremely tough hand of his own—and say, "So far and no further." The House must make its view absolutely clear.
If Europe gets away with it this time, it will do it again. Instead of a sum of £12 million, it could be £120 million, and so on. Let us stop it now. It rests with the Financial Secretary to stand up—and be an Oliver Cromwell, I was going to say—and decapitate the law-breaker.

Mr. Moate: On a point of order, Mr. Deputy Speaker. On several occasions this evening—including the Financial Secretary's statement—it has been stated that the motion is wrong. The Financial Secretary said explicitly that we were discussing a sum of £12 million; the motion refers to £450 million. The Financial Secretary said that it could have been more happily worded—which is a euphemistic way of saying that it is wrong.
Surely, Mr. Deputy Speaker, you have heard enough to realise that the House is being asked to pass a motion that has been admitted to be incorrect. Surely that cannot be permissible. What powers have you to urge the Government either to withdraw the motion, or to have it amended by manuscript amendment now, so that the House can at least be asked to deal with a motion that is correct and honest?

Mr. Deputy Speaker: That matter was raised with Mr. Speaker yesterday on a point of order. Mr. Speaker ruled that the motions were in order, and that if they were found in due course to be illegal, it would be a matter for the courts. That ruling is on the record, and I cannot add to it or subtract from it.

Mr. Moate: Further to that point of order, Mr. Deputy Speaker. I appreciate your ruling, but, with respect, I am making a rather different point. It does not concern the question of legality; it simply concerns the accuracy of the motion. The motion suggests that the whole £450 million relates to illegal payments, but the Financial Secretary has

made it clear that the illegal payment is just £12 million. The motion is admittedly wrong; surely it should be withdrawn or ruled out of order.

Mr. Deputy Speaker: That is a matter for debate; it is not a point of order.

Mr. Marlow: Further to the point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. I have dealt with the point of order; and it was dealt with by Mr. Speaker yesterday. There is very little time left.

Mr. Marlow: On a point of order, Mr. Deputy Speaker. As we have been told, we are discussing an illegal budget—an illegal payment. Can we somehow be given legal advice by a Law Officer of the Crown about the implications of the House conniving at an illegal payment—conniving at fraud? The House has agreed to pay money that is illegal.

Mr. Deputy Speaker: Order. We are debating a matter that is in order. Hon. Members are perfectly entitled, when the time comes very shortly, to vote against it if they so desire. We would not be debating the matter if it were not in order.

Mr. Budgen: On a point of order, Mr. Deputy Speaker. Surely there is a specifically legal point involved in advising the House about our rights in relation to the institutions of the European Community. My hon. Friend the Financial Secretary, with his distinguished background as an Old Bailey criminal lawyer, was most effective in defending the Government in support of fraudulent activities; but surely it would not be unkind or impertinent to him to demand something rather distinguished in the way of advice from the Attorney-General. He says that there are many important manifestations of the federal law of the EEC that are unknown to the House. We should like to know our chances of preventing the payments by going through the no doubt very splendid procedures of the European Court. Until we have the Attorney-General's advice, we are in the dark.

Mr. Deputy Speaker: The hon. Gentleman may be in time to tempt the Financial Secretary to rise, but he certainly will not tempt me.

Mr. Nigel Spearing: It seems to me that the question is not about illegality, but about whether or not the budget is legal. In a powerful speech, the hon. Member for Antrim, North (Rev. Ian Paisley) put his finger on the point. We are now discussing political power and authority—the power of a person and, in the end, of the House. By tabling a motion on Friday, which unfortunately I did not see because I was not here, the Government have restricted our debate to an hour and a half. That is wrong. The Chairman of the Treasury and Civil Service Select Committee, which has produced reports on this matter, has not spoken. He should have been able to make a contribution. Also, for all his qualities, the Financial Secretary did not really explain what is going on. It would have been better if the Government had presented a document in the form of a White Paper to explain the background before the debate took place.

Mr. Derek Enright: That is unreasonable.

Mr. Spearing: In this Parliament, we want explanations from our Government before the debate starts. We have not had that, and that is why we will force a Division. The traditional way of showing dissatisfaction with the activities of a Government or their proposals that have not been properly debated is to move a motion suggesting a token reduction in the amount involved. My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) said that, technically, that might make some reduction in this, that or the other. However, everybody knows that, when we used to table motions about reductions of salaries or of a vote, it was a protest.
We have not had proper procedural debates on this topic. The Government have not provided sufficient information, and there is confusion over whether the sum is £12 million or £450 million, not to mention the £1,000 million of contingency vote that is mentioned elsewhere but to which no hon. Member has referred. Given all that, hon. Members should feel justified in voting for the amendment as a token of their dissatisfaction at the way in which the House has been treated.
I hope that the Chairman of the Treasury Select Committee will have a few seconds to address the House.

Mr. Terence L. Higgins: I have only a few seconds. Can the Financial Secretary confirm that it is the Government's intention to oppose the illegal budget? Can he confirm that, if we go along with the estimate and win, the money will be returned to us by one means or another, perhaps by withholding VAT payments?

It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Questions necessary to dispose of the motions relating to supplementary estimates 1991–92 and estimates 1992–93, pursuant to the Order yesterday.

Question put, That the amendment be made:—

The House proceeded to a Division—

Mr. Budgen (seated and covered): On a point of order, Mr. Deputy Speaker. Can the Financial Secretary briefly answer the questions put by my right hon. Friend the Member for Worthing (Mr. Higgins)? Do the Government intend to oppose this illegal—

Mr. Deputy Speaker: Order. I have put the Question and we are now proceeding to a Division. I cannot allow any further debate.

Sir Teddy Taylor (seated and covered): On a point of order, Mr. Deputy Speaker. Nobody shouted, "No." We did not hear anyone shout, "No."

Mr. Deputy Speaker: I do not want any confusion. I put the Question on the amendment of the hon. Member for Southend, East (Sir T. Taylor). To be completely clear, I shall put the Question again.

Question put, That the amendment be made:—

The House proceeded to a Division—

Mr. Marlow (seated and covered): On a point of order, Mr. Deputy Speaker. There is general agreement in the House that the first time you put the Question a strong Aye was given, but there was no contrary indication, no "No".

Mr. Deputy Speaker: Order. We have been through this process twice now. It was wholly clear to me that there

were both Ayes and Noes, and we are now proceeding to a Division. [Interruption.] Order. There can be no further points of order.

Mr. Marlow: (seated and covered): On a point of order, Mr. Deputy Speaker. You will be aware that the proceedings of this House are recorded. If it transpires on that recording that there was no No given the first time you put the Question, is not the second time you put the Question invalid, and does not the amendment therefore pass without a Division? The evidence is there and the matter can be checked.

Mr. Deputy Speaker: Order. The House knows the procedures very well. I have already put the Question on the amendment of the hon. Member for Southend, East (Sir T. Taylor), and we are now proceeding to vote on that amendment.

Mr. Marlow (seated and covered): Further to that point of order, Mr. Deputy Speaker. Is it in order for the Question to be put a second time when the amendment was passed without demur on the first occasion?

Mr. Deputy Speaker: Order. We are now proceeding to a Division. [Interruption.] Order. There are no further points of order.

Mr. Tim Janman (Thurrock) (seated and covered): On a point of order, Mr. Deputy Speaker. Is it in order to proceed to a Division when there were no Noes when you first put the Question?

Mr. Deputy Speaker: Order. I shall take no further points of order until the Division is completed.

The House having divided: Ayes 27, Noes 220.

Division No. 67]
[11.46 pm


AYES


Barnes, Harry (Derbyshire NE)
Mitchell, Austin (G't Grimsby)


Beggs, Roy
Moate, Roger


Body, Sir Richard
Molyneaux, Rt Hon James


Budgen, Nicholas
Paisley, Rev Ian


Cash, William
Ross, William (Londonderry E)


Conway, Derek
Shepherd, Richard (Aldridge)


Cryer, Bob
Skinner, Dennis


Dover, Den
Spearing, Nigel


Gill, Christopher
Winnick, David


Gorman, Mrs Teresa
Winterton, Mrs Ann


Howarth, G. (Cannock &amp; B'wd)
Winterton, Nicholas


Janman, Tim



Kilfedder, James
Tellers for the Ayes:


Leighton, Ron
Sir Teddy Taylor and


McCrea, Rev William
Mr. Jonathan Aitken.


Marlow, Tony





NOES


Alexander, Richard
Blackburn, Dr John G.


Alison, Rt Hon Michael
Blaker, Rt Hon Sir Peter


Allason, Rupert
Boscawen, Hon Robert


Alton, David
Boswell, Tim


Amess, David
Bottomley, Peter


Amos, Alan
Bottomley, Mrs Virginia


Arbuthnot, James
Bowden, Gerald (Dulwich)


Arnold, Jacques (Gravesham)
Bowis, John


Arnold, Sir Thomas
Boyson, Rt Hon Dr Sir Rhodes


Ashby, David
Brazier, Julian


Atkins, Robert
Bright, Graham


Baker, Rt Hon K. (Mole Valley)
Bruce, Ian (Dorset South)


Baker, Nicholas (Dorset N)
Burns, Simon


Baldry, Tony
Butcher, John


Banks, Robert (Harrogate)
Butler, Chris


Batiste, Spencer
Butterfill, John


Bellingham, Henry
Carlisle, Kenneth (Lincoln)


Bennett, Nicholas (Pembroke)
Carrington, Matthew






Channon, Rt Hon Paul
Latham, Michael


Chapman, Sydney
Lawrence, Ivan


Churchill, Mr
Lee, John (Pendle)


Clark, Rt Hon Alan (Plymouth)
Leigh, Edward (Gainsbor'gh)


Clark, Dr Michael (Rochford)
Lennox-Boyd, Hon Mark


Clarke, Rt Hon K. (Rushcliffe)
Lester, Jim (Broxtowe)


Colvin, Michael
Livsey, Richard


Cope, Rt Hon Sir John
Lloyd, Sir Ian (Havant)


Couchman, James
Lloyd, Peter (Fareham)


Currie, Mrs Edwina
Lord, Michael


Davies, Q. (Stamf'd &amp; Spald'g)
Luce, Rt Hon Sir Richard


Davis, David (Boothferry)
Lyell, Rt Hon Sir Nicholas


Day, Stephen
MacGregor, Rt Hon John


Devlin, Tim
MacKay, Andrew (E Berkshire)


Dickens, Geoffrey
Maclean, David


Dorrell, Stephen
McLoughlin, Patrick


Dunn, Bob
McNair-Wilson, Sir Patrick


Evans, David (Welwyn Hatf'd)
Madel, David


Evennett, David
Malins, Humfrey


Fallon, Michael
Marshall, Sir Michael (Arundel)


Field, Barry (Isle of Wight)
Martin, David (Portsmouth S)


Fishburn, John Dudley
Maude, Hon Francis


Fookes, Dame Janet
Mayhew, Rt Hon Sir Patrick


Forsyth, Michael (Stirling)
Mellor, Rt Hon David


Forth, Eric
Meyer, Sir Anthony


Fowler, Rt Hon Sir Norman
Miller, Sir Hal


Fox, Sir Marcus
Mills, Iain


Franks, Cecil
Mitchell, Andrew (Gedling)


Freeman, Roger
Mitchell, Sir David


French, Douglas
Monro, Sir Hector


Garel-Jones, Rt Hon Tristan
Montgomery, Sir Fergus


Glyn, Dr Sir Alan
Morris, M (N'hampton S)


Goodlad, Rt Hon Alastair
Morrison, Sir Charles


Goodson-Wickes, Dr Charles
Morrison, Rt Hon Sir Peter


Gorst, John
Moss, Malcolm


Greenway, Harry (Ealing N)
Moynihan, Hon Colin


Greenway, John (Ryedale)
Neale, Sir Gerrard


Gregory, Conal
Nelson, Anthony


Griffiths, Peter (Portsmouth N)
Nicholls, Patrick


Grist, Ian
Nicholson, David (Taunton)


Ground, Patrick
Nicholson, Emma (Devon West)


Hague, William
Norris, Steve


Hamilton, Rt Hon Archie
Oppenheim, Phillip


Hamilton, Neil (Tatton)
Page, Richard


Hampson, Dr Keith
Paice, James


Hanley, Jeremy
Patnick, Irvine


Hannam, Sir John
Patten, Rt Hon Chris (Bath)


Hargreaves, A. (B'ham H'll Gr')
Pawsey, James


Hargreaves, Ken (Hyndburn)
peacock, Mrs Elizabeth


Harris, David
Portillo, Michael


Haselhurst, Alan
Powell, William (Corby)


Hawkins, Christopher
Price, Sir David


Hayes, Jerry
Raffan, Keith


Hayhoe, Rt Hon Sir Barney
Raison, Rt Hon Sir Timothy


Heathcoat-Amory, David
Redwood, John


Hicks, Mrs Maureen (Wolv' NE)
Riddick, Graham


Hicks, Robert (Cornwall SE)
Ridley, Rt Hon Nicholas


Hill, James
Rifkind, Rt Hon Malcolm


Hind, Kenneth
Roberts, Rt Hon Sir Wyn


Hogg, Hon Douglas (Gr'th'm)
Rossi, Sir Hugh


Hordern, Sir Peter
Sackville, Hon Tom


Howarth, Alan (Strat'd-on-A)
Sayeed, Jonathan


Howell, Rt Hon David (G'dford)
Scott, Rt Hon Nicholas


Hughes, Robert G. (Harrow W)
Shaw, David (Dover)


Hunt, Rt Hon David
Shaw, Sir Giles (Pudsey)


Hurd, Rt Hon Douglas
Shaw, Sir Michael (Scarb')


Irvine, Michael
Sims, Roger


Jack, Michael
Skeet, Sir Trevor


Jackson, Robert
Smith, Tim (Beaconsfield)


Johnson Smith, Sir Geoffrey
Speller, Tony


Jones, Gwilym (Cardiff N)
Spicer, Sir Jim (Dorset W)


Jones, Robert B (Herts W)
Spicer, Michael (S Worcs)


Jopling, Rt Hon Michael
Squire, Robin


King, Roger (B'ham N'thfield)
Stanbrook, Ivor


King, Rt Hon Tom (Bridgwater)
Stanley, Rt Hon Sir John


Kirkhope, Timothy
Stephen, Nicol


Knapman, Roger
Stern, Michael


Knight, Greg (Derby North)
Stevens, Lewis


Knowles, Michael
Stewart, Andy (Sherwood)


Knox, David
Stewart, Rt Hon Sir Ian





Sumberg, David
Wheeler, Sir John


Taylor, Ian (Esher)
Whitney, Ray


Temple-Morris, Peter
Widdecombe, Ann


Thompson, Patrick (Norwich N)
Wilkinson, John


Thorne, Neil
Wilshire, David


Thurnham, Peter
Wolfson, Mark


Townsend, Cyril D. (B'heath)
Wood, Timothy


Tredinnick, David
Woodcock, Dr. Mike


Vaughan, Sir Gerard
Yeo, Tim


Viggers, Peter
Young, Sir George (Acton)


Walden, George



Wallace, James
Tellers for the Noes:


Wardle, Charles (Bexhill)
Mr. David Lightbown and


Wells, Bowen
Mr. John M. Taylor.

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 223, Noes 16.

Division No. 68]
[12 midnight


AYES


Aitken, Jonathan
Fallon, Michael


Alexander, Richard
Field, Barry (Isle of Wight)


Alison, Rt Hon Michael
Fishburn, John Dudley


Allason, Rupert
Fookes, Dame Janet


Alton, David
Forsyth, Michael (Stirling)


Amess, David
Forth, Eric


Amos, Alan
Fowler, Rt Hon Sir Norman


Arbuthnot, James
Fox, Sir Marcus


Arnold, Jacques (Gravesham)
Franks, Cecil


Arnold, Sir Thomas
Freeman, Roger


Ashby, David
French, Douglas


Aspinwall, Jack
Garel-Jones, Rt Hon Tristan


Atkins, Robert
Glyn, Dr Sir Alan


Baker, Rt Hon K. (Mole Valley)
Goodlad, Rt Hon Alastair


Baker, Nicholas (Dorset N)
Goodson-Wickes, Dr Charles


Baldry, Tony
Gorst, John


Banks, Robert (Harrogate)
Greenway, Harry (Ealing N)


Batiste, Spencer
Greenway, John (Ryedale)


Bellingham, Henry
Gregory, Conal


Bennett, Nicholas (Pembroke)
Griffiths, Peter (Portsmouth N)


Blackburn, Dr John G.
Grist, Ian


Blaker, Rt Hon Sir Peter
Ground, Patrick


Boscawen, Hon Robert
Hague, William


Boswell, Tim
Hamilton, Rt Hon Archie


Bottomley, Peter
Hampson, Dr Keith


Bottomley, Mrs Virginia
Hanley, Jeremy


Bowden, Gerald (Dulwich)
Hannam, Sir John


Bowis, John
Hargreaves, A. (B'ham H'll Gr')


Boyson, Rt Hon Dr Sir Rhodes
Hargreaves, Ken (Hyndburn)


Brazier, Julian
Harris, David


Bright, Graham
Haselhurst, Alan


Bruce, Ian (Dorset South)
Hawkins, Christopher


Burns, Simon
Hayes, Jerry


Butcher, John
Hayhoe, Rt Hon Sir Barney


Butler, Chris
Heathcoat-Amory, David


Butterfill, John
Hicks, Mrs Maureen (Wolv' NE)


Carlisle, Kenneth (Lincoln)
Hicks, Robert (Cornwall SE)


Carrington, Matthew
Higgins, Rt Hon Terence L.


Channon, Rt Hon Paul
Hill, James


Chapman, Sydney
Hind, Kenneth


Chope, Christopher
Hogg, Hon Douglas (Gr'th'm)


Churchill, Mr
Hordern, Sir Peter


Clark, Rt Hon Alan (Plymouth)
Howarth, Alan (Strat'd-on-A)


Clark, Dr Michael (Rochford)
Howell, Rt Hon David (G'dford)


Clarke, Rt Hon K. (Rushcliffe)
Hughes, Robert G. (Harrow W)


Colvin, Michael
Hunt, Rt Hon David


Cope, Rt Hon Sir John
Hurd, Rt Hon Douglas


Couchman, James
Irvine, Michael


Currie, Mrs Edwina
Jack, Michael


Davies, Q. (Stamf'd &amp; Spald'g)
Jackson, Robert


Davis, David (Boothferry)
Jones, Gwilym (Cardiff N)


Day, Stephen
Jones, Robert B (Herts W)


Devlin, Tim
Jopling, Rt Hon Michael


Dickens, Geoffrey
King, Roger (B'ham N'thfield)


Dorrell, Stephen
King, Rt Hon Tom (Bridgwater)


Dunn, Bob
Kirkhope, Timothy


Evans, David (Welwyn Hatf'd)
Knapman, Roger


Evennett David
Knight, Greg (Derby North)






Knowles, Michael
Raffan, Keith


Knox, David
Raison, Rt Hon Sir Timothy


Latham, Michael
Redwood, John


Lawrence, Ivan
Riddick, Graham


Lee, John (Pendle)
Ridley, Rt Hon Nicholas


Leigh, Edward (Gainsbor'gh)
Rifkind, Rt Hon Malcolm


Lennox-Boyd, Hon Mark
Roberts, Rt Hon Sir Wyn


Lester, Jim (Broxtowe)
Rossi, Sir Hugh


Lightbown, David
Sackville, Hon Tom


Livsey, Richard
Sayeed, Jonathan


Lloyd, Sir Ian (Havant)
Scott, Rt Hon Nicholas


Lloyd, Peter (Fareham)
Shaw, David (Dover)


Lord, Michael
Shaw, Sir Giles (Pudsey)


Luce, Rt Hon Sir Richard
Shaw, Sir Michael (Scarb')


Lyell, Rt Hon Sir Nicholas
Sims, Roger


MacGregor, Rt Hon John
Skeet, Sir Trevor


MacKay, Andrew (E Berkshire)
Smith, Tim (Beaconsfield)


Maclean, David
Speller, Tony


McLoughlin, Patrick
Spicer, Sir Jim (Dorset W)


McNair-Wilson, Sir Patrick
Squire, Robin


Madel, David
Stanbrook, Ivor


Malins, Humfrey
Stanley, Rt Hon Sir John


Marshall, Sir Michael (Arundel)
Stephen, Nicol


Martin, David (Portsmouth S)
Stern, Michael


Maude, Hon Francis
Stevens, Lewis


Mayhew, Rt Hon Sir Patrick
Stewart, Andy (Sherwood)


Mellor, Rt Hon David
Stewart, Rt Hon Sir Ian


Meyer, Sir Anthony
Sumberg, David


Miller, Sir Hal
Taylor, Ian (Esher)


Mills, Iain
Temple-Morris, Peter


Mitchell, Andrew (Gedling)
Thompson, Patrick (Norwich N)


Mitchell, Sir David
Thorne, Neil


Moate, Roger
Thurnham, Peter


Monro, Sir Hector
Townsend, Cyril D. (B'heath)


Montgomery, Sir Fergus
Tredinnick, David


Morris, M (N'hampton S)
Vaughan, Sir Gerard


Morrison, Sir Charles
Viggers, Peter


Morrison, Rt Hon Sir Peter
Walden, George


Moss, Malcolm
Wallace, James


Moynihan, Hon Colin
Wardle, Charles (Bexhill)


Neale, Sir Gerrard
Wells, Bowen


Nelson, Anthony
Wheeler, Sir John


Nicholls, Patrick
Whitney, Ray


Nicholson, David (Taunton)
Widdecombe, Ann


Nicholson, Emma (Devon West)
Wilkinson, John


Norris, Steve
Wilshire, David


Oppenheim, Phillip
Wolfson, Mark


Page, Richard
Wood, Timothy


Paice, James
Woodcock, Dr. Mike


Patnick, Irvine
Yeo, Tim


Patten, Rt Hon Chris (Bath)
Young, Sir George (Acton)


Pawsey, James



Peacock, Mrs Elizabeth
Tellers for the Ayes:


Portillo, Michael
Mr. John M. Taylor and


Powell, William (Corby)
Mr. Neil Hamilton.


Price, Sir David





NOES


Beggs, Roy
Paisley, Rev Ian


Body, Sir Richard
Ross, William (Londonderry E)


Budgen, Nicholas
Shepherd, Richard (Aldridge)


Cash, William
Taylor, Sir Teddy


Dover, Den
Winterton, Mrs Ann


Gill, Christopher
Winterton, Nicholas


Gorman, Mrs Teresa



Janman, Tim
Tellers for the Noes:


McCrea, Rev William
Mr. Bob Cryer and


Molyneaux, Rt Hon James
Mr. Dennis Skinner.

Question accordingly agreed to.

Resolved,
That a further supplementary sum not exceeding £450,000,000 he granted to Her Majesty out of the Consolidated Fund to defray the charges for civil services

which will come in course of payment during the year ending on 31st March 1992, as set out in House of Commons Paper No. 182 of Session 1991–92.

ESTIMATES 1992–93 (VOTE ON ACCOUNT)

Resolved,
That a further sum not exceeding £1,000 be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for defence and civil services for the year ending on 31st March 1993, as set out in House of Commons Paper No. 183 of Session 1991–92.—[Mr. Maude.]

Bill ordered to be brought in upon the foregoing Resolutions by the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. David Mellor, Mrs. Gillian Shephard, Mr. John Maples and Mr. Frank Maude.

CONSOLIDATED FUND (No. 2) BILL

Mr. Francis Maude accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on 31st March 1992 and 1993: And the same was read the First time; and ordered to be read a Second time this day and to be printed. [Bill 60.]

Mr. Spearing: On a point of order, Mr. Deputy Speaker. In the few moments at the end of the debate when I was speaking I referred to something that I thought had been said by my hon. Friend for Hemsworth (Mr. Enright). I want to make it absolutely clear that I mistook what he said. He suggested that I introduce the point of conciliation, but I thought that he said something else. Therefore, if anything I said, or the manner in which I said it, reflected upon my hon. Friend, it was completely wrong and my fault.
Can you confirm, Mr. Deputy Speaker, that the matter before us could have been debated until any hour but for the fact that the Government tabled a motion last night and no hon. Member, including any member of the official Opposition, objected to its being taken then by simply saying "Object?" Had that happened, we would have been able to debate this important matter until everyone who wished to speak had had the opportunity to do so. If you can confirm that, does that not show the unwisdom of the Government, or anyone else, in discussing matters relating to European Community finance on what is, in effect, a guillotine?

Mr. Deputy Speaker: On the hon. Gentleman's first point, he has, with his characteristic courtesy, set the record straight concerning the comments of the hon. Member for Hemsworth (Mr. Enright). On his second point, I should say that the debate was governed by the order of the House, which was agreed yesterday, that the debate should last one and half hours, and no more.

WELSH GRAND COMMITTEE

Ordered,
That, during the proceedings on the Matter of education in Wales, the Welsh Grand Committee have leave to sit twice on the first day on which it shall meet; and that, notwithstanding the provisions of Standing Order No. 88 (Meetings of standing committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee has considered the Matter for two hours at that sitting.—[Mr. Kirkhope.]

PETITION

Roads (Leicester)

Mr. Keith Vaz: I wish to present a petition on behalf of Mr. Mick Jones of Evington, Mr. John Thomas of Thurnby Lodge and Mary Draycott of Coleman, in my constituency, and Mr. John Henwood of Oadby. They have collected 112 signatures against the proposed eastern district distributor road and the A46/A47 link road.
As the House will know, there have been many debates, and many petitions have been presented on behalf of local people who are opposed to the road's going through the eastern part of the city. The desire is that the quality of life of people in Leicester should not be affected by this absurd proposal.
The petition ends with these words:
Wherefore your Petitioners pray that your honourable House urge the Secretary of State for Transport to refuse to grant permission for these roads to be built and the new alternatives be put forward for consideration to direct the traffic well outside the residential areas.
And your Petitioners, as in duty bound, will ever pray.
This is the first of a number of petitions that I shall be presenting to the House on behalf of local residents opposed to this road.

To lie upon the Table.

Staffordshire Regiment

Motion made and Question proposed, That this House do now adjourn.–[Mr. Kirkhope.]

Mr. Deputy Speaker (Sir Paul Dean): I understand that hon. Members other than the hon. Member for Stafford (Mr. Cash) may seek to intervene. I should remind the House that the Adjournment debate is, as it were, the property of the Member who has it and of the Minister who is replying. Interventions can take place only with the agreement of the hon. Member and the Minister.

Mr. William Cash: I am glad to have this opportunity to raise again the case of the Staffordshire Regiment and its proposed amalgamation. The matter raises serious and substantive issues which have evoked deep concern among right hon. and hon. Members on both sides of the House, many of whom—particularly those from Staffordshire—are here tonight. I am grateful to my right hon. Friend the Minister of State for the Armed Forces, who will reply to the debate, and to hon. Members on both sides of the House who, by their presence here after midnight, are demonstrating their anxiety about the amalgamation. As the Minister, my right hon. Friend the Member for Epsom and Ewell (Mr. Hamilton), will be aware, there is immense concern amongst my constituents and those of all hon. Members from Staffordshire and the west midlands and, indeed, Cheshire about the proposed amalgamation.
Soon after 23 July 1991, when my right hon. Friend the Secretary of State for Defence made a statement to the House outlining the shape of regimental amalgamations, a campaign to save the Staffordshire Regiment was initiated by the Save Our Staffords campaign committee. The strength of feeling about the unreasonableness of the amalgamation was amply demonstrated when, in October, I and other hon. Members presented to Mr. Speaker a petition containing almost 100,000 signatures from the people of Staffordshire and the west midlands. Tonight right hon. and hon. Members are once again demonstrating their support for a review of the rationale for the proposed amalgamation of the Staffordshire Regiment.
My right hon. Friend the Minister of State for the Armed Forces has on numerous occasions said that it is not possible to reconsider the proposed amalgamations or justify them, even when the rationale appears to be far from clear.

Mr. Nicholas Budgen: Does not my hon. Friend agree that a political decision was taken to preserve the Royal Welch Fusiliers without any amalgamation and to amalgamate the Staffords with the Cheshires, and that that was plainly in breach of the undertaking that was given to the Staffords when the North Staffords and the South Staffords amalgamated in 1959?
The House now requires a proper explanation of the political decisions that were taken. It is plainly unsatisfactory for the Minister who made those decisions, and who appears before the House to justify them, simply to say, "It wasn't me, guv; the Army Board decided this." He is the person responsible and if a political decision has been taken, it is for him to explain it and justify it.

Mr. Cash: I agree with my hon. Friend, and that is precisely why we were dissatisfied with the answers that were given, as shown on television, when the Minister was cross-examined by the Select Committee on Defence, the report of which is due soon.
The Staffordshire Regiment has already been amalgamated once since the second world war; it was not recommended for re-amalgamation by the Colonel Commandant of the Prince of Wales Division—an important factor; it meets every criterion laid down by the Army Board for retention, when many regiments do not; and it was never given the opportunity to put its case to the Army Board, when others were. I should welcome my hon. Friend's comments on those issues, should he feel able to discuss them tonight. I suspect that he may not be willing to do so.

Mr. Budgen: Why not?

Mr. Cash: That is a matter for the Minister when he replies. It is not acceptable for him or his officials to hide behind the pretext that, because decisions on amalgamations have now been made, they cannot be considered because that would open a Pandora's box and lead to every regiment clamouring for a review of its case.

Mr. Nicol Stephen: I support the hon. Gentleman's campaign. Is he aware that there is equally strong feeling in Scotland about the amalgamations of the infantry battalions there, that all-party support has been given to the campaign to save the Scottish battalions and that we, too, are awaiting an explanation of the military rationale for the cuts? No such explanation has so far been given, and it appears that the cuts have been made purely for financial reasons.

Mr. Deputy Speaker: Order. I remind hon. Members that the Adjournment is related to the future of the Staffordshire Regiment.

Mr. Cash: Just because a decision might have been ill-judged and might prove embarrassing to review is insufficient reason to refuse to review it. In any event, I draw the attention of the House to other aspects of the case for the amalgamation of the Staffordshire Regiment that do not make sense, politically or militarily.
My right hon. Friend has said frequently that he supports the regimental system. This amalgamation, which would combine people from Liverpool with those from the midlands, demonstrates no social, historical or regional communality. As one who lives north of Watford, I do not believe that those who made the decision have the faintest idea that that is a real problem.
I come to the issue of regional representation. In an interview with Severin Carrell of The Scotsman on 27 January of this year, my right hon. Friend said that it would not be "politically acceptable" to have a large number of regiments in one part of the United Kingdom and fewer in another. I agree. I agree also with his contention that
there is demand from the people of the United Kingdom that they should have local regiments to join.
Where then is the political or military rationale for retaining six English infantry regiments north of the Humber-Merseyside line, some of which are struggling to recruit, and only two in the huge population area and recruitment reservoir of the midlands? Pooling the two

regiments into one will not only reduce pride in and commitment to them; it will reduce the prospects for recruitment when employment patterns change.
The Secretary of State and the Minister of State for the Armed Forces have said that, because there will be fewer regiments, those that remain will be better able to be recruited at full strength. "Smaller is better" have been the watchwords, but how can this be so when some recruiting areas, judged by the published demographic projections, can always be expected to experience greater difficulties than others in maintaining their peacetime establishments?
Let me take the example of the King's Division, where published demographic data strongly suggest that it will not be possible to sustain the number of infantry regiments located in the area. I understand that the King's Division recently asked the Scottish Division for 100 soldiers to make up its strength in anticipation of a tour of duty in Northern Ireland. Since the King's Division cannot meet its recruiting targets, what possible justification can there be for sacrificing the Staffordshire Regiment on the altar of amalgamation when demographic projections show clearly the Staffords' huge and largely untapped recruiting potential for infantry, particularly in the core recruiting age group of 16 to 24-year-olds?

Mr. Tony Favell: It is quite clear from the speech that my hon. Friend is making that feelings run very high in Staffordshire. Is he aware that feelings run just as high in Cheshire about this proposed amalgamation?

Mr. Cash: I am indeed, and I have heard the same thing. After all, my own constituency virtually borders on Cheshire and there is absolutely no question about the feelings in both counties. I will go further and say that when the Cheshires were asked which regiments they would want to amalgamate with they put the Staffords at the bottom of the list. That is not a very good recipe for harmony.
I put it to my right hon. Friend that insufficient time —this is important—was made available in those last 36 hours for the many balances and nuances to be adequately weighed and discussed. The result is that the infantry will be overstretched to an even greater degree. The result is, too, that the Staffordshire Regiment has been unfairly singled out for amalgamation, despite the fact that it met the Army Board's own criteria, which should have militated against its amalgamation.
"Options for Change" crucially failed to take account of the unexpected, as I said in a previous debate. To be fair, who, in June or July last year, could have been expected to anticipate the abortive putsch in the old USSR, that country's subsequent collapse and the emergence of the Commonwealth of Independent States? Who could have expected the upsurge of violence in Northern Ireland or the request for a United Nations peacekeeping force in Yugoslavia, or what remains of it? And all this is in addition to any commitment we may have to the advanced rapid reaction corps. The uncertainties in this situation, the instability and volatility in Europe and elsewhere in the world speak for themselves.
I understand that in a recent letter my right hon. Friend the Secretary of State for Defence wrote to the Secretary of State for Foreign and Commonwealth Affairs regarding the Staffordshire Regiment in the following terms:
the excellent work done by the Regiment in the Gulf is not forgotten.
I truly trust that it is not.


It would be a tragedy if the Staffordshire Regiment were to be re-amalgamated at a time when other regiments have not been amalgamated once since 1945, when the regiment has an outstanding record of service to the county and to the country, when its recruitment and retention are good, when demographic trends show clearly its sustainability, while other regiments' demographic projections do not, and when the geography and regional representation arguments simply do not stand up to examination.

Mr. Nicholas Winterton: Will my hon. Friend confirm that the crux of his very excellent argument is that both the Staffordshire Regiment and the Cheshire Regiment entirely meet the criteria of the Army Board for retention as they are, while many regiments that have remained unamalgamated and unmerged do not meet those criteria, and that is the unfairness of the situation?

Mr. Cash: That indeed is the case, combined with the total inadequacy of consultation before the decision was taken.

Mr. Budgen: It is all very well talking about fairness, but a political decision was taken and, therefore, the politicians ought to explain it.

Mr. Cash: Indeed, we shall wait to hear what the Minister has to say.
I urge the Minister to consider the fact that the Staffordshire Regiment was never given the chance to put its case to the Army Board, because of a breakdown in the military hierarchy. That is where the problem lies. I also urge my right hon. Friend, in the strongest possible terms, to look again at the rationale for the amalgamation.

Mr. Bruce George: rose—

Mr. Deputy Speaker: Does the hon. Gentleman have the agreement of the hon. Member for Stafford (Mr. Cash) and the Minister of State for the Armed Forces to make a speech?

Mr. George: Yes, Sir.
I thank the hon. Member for Stafford (Mr. Cash) for allowing me to intervene. I speak on behalf of my hon. Friends the Members for Mid-Staffordshire (Mrs. Heal) and for Newcastle-under-Lyme (Mrs. Golding) and many thousands of people in Staffordshire, the west midlands and Cheshire.
My objections to "Options for Change" and to the enforced merger of the Cheshire and Staffordshire Regiments are many. The reduction to 116,000 and 38 infantry battalions is absurd and dangerous. Overstretch is inevitable, especially as a result of our commitments in Northern Ireland. In one crisis some years ago, there were a dozen infantry battalions in Belfast alone and only 36 will now be available for Northern Ireland.
Was our leadership of the rapid reaction corps gained on a false prospectus? Will NATO be happy with the double hatting of the rapid reaction corps and forces engaged in Belfast and Belize? Will we keep control of the Allied Command Europe rapid reaction corps?
The Ministry of Defence has got the threat analysis wrong. How long will it be before that folly is exposed?

The Treasury smoking gun is visible for all who wish to see it. Why should an analysis of security be determined by the Treasury rather than the Ministry of Defence?
The key question is whether an Army of the size proposed by the Government will prove sufficient in peacetime, let alone crisis and war. I am certain that it will not. The method by which the Army Board and Ministers chose the regiments for merger was shameful, and was exacerbated by their wilful refusal, in public and in private, to give the Defence Select Committee, the Staffordshire Regiment and hon. Members an opportunity to understand why they were chosen. It is an issue not of national security but of politics. Why do not the Government come clean and tell us why the regiments were merged? Silence will prove more costly to them in the long run.
The decision to merge the Staffordshire and Cheshire Regiments is bizarre and has not been explained. The Minister hopes that the issue will go away, but it will not. I guarantee that it will return to haunt him, his colleagues and the members of the Army Board who endorsed it.

The Minister of State for the Armed Forces (Mr. Archie Hamilton): I congratulate my hon. Friend the Member for Stafford (Mr. Cash) on securing this debate. I am well aware of his close interest in this subject and that he has argued diligently on behalf of the Staffordshire Regiment.
The House will be aware of the background to the Army restructuring under which the Staffordshire and Cheshire Regiments will merge in 1993. It is important that the necessity for this restructuring should be fully understood and I make no apologies for repeating some of the many points which my right hon. Friend the Secretary of State for Defence and I have made before in this House.
The past two years have seen radical changes in the European security environment, where the scale of conventional forces now facing the west has declined significantly. It was against that backdrop that what has now become widely known as the "Options for Change" exercise was born.
Forty years of peace under NATO demonstrated that the security of the United Kingdom is best served by maintaining effective national forces as part of a powerful alliance. With the collapse of the Warsaw pact and the withdrawal from eastern Europe of forces of the former Soviet Union, the risks of conflict have changed. Europe no longer faces such a threat from massive forces able to move forward across a wide front in a matter of days. But there remain political and economic changes in Europe and continuing turbulence in the middle east and elsewhere.
I am aware that many believe that those events call into question the small size of the reductions announced. Others argue for even smaller forces. The Government have taken full account of all those considerations and cannot agree with either those who say that the cuts are too great or those whose enthusiasm for cuts in defence would leave the nation without effective armed forces. I must emphasise that our plans were developed with a considerable degree of caution in recognition that the future course of events, in Europe and elsewhere, is still far from certain and that dangerous instabilities continue to exist. The hon. Member for Walsall, South (Mr. George) made that point. We will be vigilant and, as always, keep


our force levels and force structures under review. That said, only a major change in future commitments, requiring additional long-term deployments, would require reconsideration of the size and shape of the Army overall and, in particular, the number of infantry battalions.
Turning now to the Staffords, the regiment and its predecessors have a fine and distinguished history, most recently in the Gulf but also in both world wars and in the Peninsular and Crimean wars. It is right and proper to pay credit to so many achievements over so long a period. I share the sadness of all those who regret that this arid other famous regiments should now have to merge or be disbanded.
Of course, the decision to amalgamate the Staffords and the Cheshires was not welcomed by many of those associated with either regiment. I think it would be fair to say that every regiment would rather remain unchanged, but change to the decisions we have made can be done only at the expense of another regiment. A similar degree of pain and disappointment has been felt by all those affected by the changes, although I realise that this is no compensation for those concerned.

Mr. Budgen: Is it not the case that before the Secretary of State's announcement it was generally thought that the Royal Welch Fusiliers would be amalgamated, that there was some surprise when that regiment was left unamalgamated, and that plainly a political decision was taken to amalgamate the Staffords and the Cheshires? Will my right hon. Friend, who is the political head, please tell us what the political considerations were?

Mr. Hamilton: I am not prepared to comment on the process of the decision-making.

Mr. Nicholas Winterton: Why not?

Mr. Hamilton: I am about to reply. If my hon. Friend will be kind, I will make my point without him shouting at me. Military considerations were taken into account and recommendations were made to the Army Board, of which other Ministers and I are members. Those military considerations were accepted by the Army Board as a whole.

Mr. Cash: rose—

Mr. Hamilton: I am also aware of a great deal of parliamentary and public interest in support of the Staffords. It is heartening to know that the regiment is held in such high public esteem.

Mr. Cash: Will my right hon. Friend give way?

Mr. Hamilton: No. I have a lot to say and I cannot give way.
Many of those seeking to challenge the decisions taken about individual regiments have quoted various criteria in support of their views. Past and present manning patterns, previous amalgamations—my hon. Friend made the point that the Staffords were the result of such an exercise in 1959—future demographic changes and the need to retain appropriate regional representations are all cases in point. But I must repeat that those criteria were fully taken into account when addressing the future of individual regiments. Taking any of those factors in isolation is

misleading, and it was the Army Board's task to weigh those factors, along with all other relevant issues, in coming to its decision.

Mr. Cash: Will my right hon. Friend give way?

Mr. Hamilton: I am not giving way. Containing, as it does, the senior serving members of the Army, the board was uniquely placed to weigh all the issues involved.

Several Hon. Members: rose—

Mr. Hamilton: This is an Adjournment debate and I have a very short time to answer it.
The board was also uniquely placed to devise a solution which was in the best interests of the Army as a whole. If we were to go into detail on what points were considered when it came to the different amalgamations that were put forward, that would not satisfy anybody who was unhappy about a certain regiment being amalgamated with another. It would merely give people a reason to question the assumptions, and the whole process would go on and on. If my hon. Friends and hon. Members think that it is good for the Army to reopen the whole issue, and to have the whole thing thrown back into the melting pot, they are totally and utterly wrong. The best thing we can do is to accept the decisions that have been made, unpalatable to some as they may be.

Mrs. Llin Golding: rose—

Mr. Hamilton: I am not giving way. I wish that hon. Members would not try to invervene. I am not going to give way because I have a lot to say.
If hon. Members feel that it is for the benefit of the Army to reopen all these questions, they are wrong. Supporters of the Staffords and other infantry regiments facing changes have expressed concern about current overstretch and the possibility of its continuing—the hon. Member for Walsall, South made that point—or even worsening, following the restructuring. Regrettably, many inaccurate figures have been quoted by those who seek a reprieve. It may assist the House if I set out again the facts which underlie the Government's effort to eliminate overstretch as part of our commitment to a better future Army.
Regular infantry commitments in Germany will be reduced by a total of 10 battalions: three from Berlin and seven from British Army of the Rhine. The diminished land threat and increased warning time will allow five regular battalions previously committed to military home defence to be replaced by the Territorial Army, and withdrawal from Hong Kong will, by 1997, release a further four battalions. Thus by 1997, infantry battalion commitments will be reduced by 19. By contrast, the number of regular battalions will reduce by only 17, thereby leaving us with two additional battalions which will be made available to the Allied Command Europe rapid reaction corps.
The future Army will therefore be well placed to meet expected NATO readiness and availability requirements for the Allied Command Europe rapid reaction corps, while at the same time being able to meet existing emergency tour plot obligations with much improved tour intervals. Longer warning times in Europe have given us greater flexibility over how we meet our emergency tour plot commitments and it will be possible for units based in Germany to play a greater role in those deployments than


has been possible up to now. We plan also to make more frequent use of the Royal Marines and other arms in the emergency tour plot. Overall, we are well placed to ensure that the preferred 24 month tour plot—which is not always achieved now—will be achieved in the future.

Mr. Cash: Will my right hon. Friend explain what connection this matter has with the decision that was taken last July to amalgamate the Cheshires with the Staffords? What is the relevance of what my right hon. Friend is saying? We understand the basic arguments in relation to "Options for Change", but fail to understand the relevance of the arguments that my right hon. Friend the Minister is now advancing to the decision taken last July.

Mr. Hamilton: One of the arguments being proposed is that, in practice, we shall not have enough infantry battalions to do the jobs that we are being asked to do.

Mr. Nicholas Winterton: There will not be enough.

Mr. Hamilton: My hon. Friend clearly has not listened to what I have been saying.

Mr. Winterton: I do not believe it.

Mr. Hamilton: If he does not believe it, that is a different matter. It is up to him to decide whether he believes me or not. There will be two more infantry battalions to meet our commitments due to the reorganisation. That is important when addressing the overall issue made by the hon. Member for Walsall, South who believes that the reductions in number in the Army are too great and mean that we will be unable to meet our commitments. That is not the case.

Mr. Budgen: Will my right hon. Friend give way?

Mr. Hamilton: No, I shall not give way because I have much more to say.
To the hon. Member for Walsall, South I say that, if there is a long-term change in our commitments and we become involved in long-lasting commitments that tie up additional infantry battalions, we shall have to reconsider the changes that we have made. However, we are happy that we have the battalions to carry out our present commitments. Therefore, we have had to take hard and difficult decisions on cap badge regiments. I agree that some people will always be unhappy. It is not only the Staffords and Cheshires who are concerned; there is anxiety in Scotland.
I was amazed at the intervention of the hon. Member for Kincardine and Deeside (Mr. Steven) who complained about the amalgamations in Scotland, when the Liberals call for a 50 per cent. cut in defence spending by the end of the century. It is difficult to see how that policy could be achieved without amalgamating even more regiments in Scotland.
I cannot stress enough that eliminating overstretch was a primary concern during the decision-making process. The difficulties that the infantry are experiencing are largely a result of undermanning and the reality is that the existing 55 infantry battalions are effectively reduced in manpower terms to the equivalent of only 51. That has meant that units have suffered increased turbulence and

some battalions have had to undertake emergency tours at intervals significantly below the 24-month period that it has been long-standing Army policy to achieve.
Following amalgamation with the Cheshires, the new regiment should be able to achieve full strength, thus eliminating the cause of overstretch—

Mr. Nicholas Winterton: They are over-recruited now.

Mr. Hamilton: They are not over-recruited now. The Staffords are not over-recruited, but under-recruited now.

Mr. Winterton: They are.

Mr. Hamilton: They are not. This is an absurd conversation. I am telling my hon. Friend that the Staffords are under-recruited.
It is neither efficient nor effective to have units continually under strength. They struggle to meet their commitments, and, when deployed for an emergency tour, have to borrow men from other units to make up a full deployment, thus exacerbating overstretch in other battalions.
The number of battalions in the future Army is designed to ensure that that kind of overstretch will not normally occur, especially at a time when demography is having an adverse effect on recruitment.
My hon. Friend the Member for Stafford raised also the criticisms that have been made of a lack of consultation before the decisions were announced. It was recognised from the outset that it would not be possible to consult about every conceivable option during the initial consultation phase. Consultation was therefore designed primarily to allow regiments to put forward their own ideas on amalgamations and to state their general positions.
I assure the House that the Staffords' wish to avoid amalgamation was fully taken into account, but the same wish was expressed by many other regiments, and I regret that it was not possible to satisfy them all. The ultimate decision in favour of a merger with the Cheshire Regiment was made in full knowledge of the objections that might be raised by the regiment and its supporters.
My colleagues and I have been pressed on numerous occasions to embark on detailed explanations of judgments as they affect individual regiments, including how and why they were made. The Army Board concluded that to do that would inevitably be divisive, painful for the units concerned, and altogether unproductive. For those tempted to believe that view was imposed by Ministers, I may point out that it is the view of senior Army officers on the board, with whom Ministers agree.
The question of suitable regional representation was also raised on a number of occasions, and was an important consideration during the board's discussions. The significance of local affiliations and the "family" feeling of infantry regiments is in no way underestimated. It is part of what makes the regimental system the success that it is.
The new regiment will continue to recruit from areas covered by its predecessors, and will seek to maintain and build on existing local links. Those two factors will help to ensure that the county continues to be represented in future, and will mean that those living in the area will have no difficulty identifying with their local regiment.

The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fourteen minutes to One o'clock.